×

Maine braces for possible government shutdown amid budget battle

June 30 (Reuters) - Maine was bracing for a possible partial government shutdown on Friday, an outcome Governor Paul LePage warned was increasingly likely if the legislature's final budget deal did not cut income taxes.

LePage, a second-term Republican, said he would declare a state of civil emergency if a budget is not reached by midnight (0400 Saturday GMT), which would keep state police, prisons, parks and tax collection services but close most other aspects of state government.

"I will tell you this: If they put a tax increase, ready for a shutdown. End of story," LePage said in a Thursday interview on Maine's WGAN radio. "They're playing chicken at 100 miles per hour and I'm telling you something, you want to play chicken, let's play chicken."

Legislators are negotiating a roughly $7 billion two-year budget, with the main sticking point being how to fully fund state schools. Voters in November passed a measure imposing a 3 percent income tax on state residents who earn more than $200,000 a year, a measure the governor and statehouse Republicans object to.

The Democratic Speaker of the state House of Representatives, Sara Gideon, has blasted the threat of a shutdown, saying earlier this week, "We must find a path forward and close this budget."

Maine state law gives the governor 10 days to respond to any budget passed by the legislator. LePage warned on Thursday he planned to wait that long before vetoing any budget that raised taxes. Most of the government would be shut during that time.

Delays this year in negotiations leave the state, with a heavily tourist-dependent economy, facing the prospect of a partial government shutdown at the start of the long July 4 holiday weekend.

A Maine advocacy group on Thursday sued the state in federal court, seeking an order that would ensure that public assistance payments continue uninterrupted to the 450,000 people in the state, about one in three residents, who receive them.

In 1991 the state government shut down for several weeks as a result of a budget impasse, and lawmakers reached a deal only after crowds of furloughed state workers picketed the capitol in Augusta. (Reporting by Scott Malone in Boston; Editing by Richard Chang)