AUGUSTA — A new tax revenue forecast released Tuesday shows state government will end its fiscal year in June solidly in the black.
The forecast that revenues will exceed budget by $461.9 million this year stands in sharp contrast to projections last June that the state could face a 3-year budget shortfall of close to $1.4 billion.
“That State revenues have not only returned to pre-pandemic levels but have surpassed those estimates is a testament to the power of the Federal stimulus, our prudent fiscal management of the State budget, the resiliency of Maine businesses and workers, and our focus on keeping Maine people and our economy healthy,” Democratic Gov. Janet Mills said in a prepared statement.
“As a result, we have managed to hold the State budget steady while ensuring a robust public health response, protecting essential health care and life-saving services, supporting public education, and providing relief for Maine families and businesses most in need during these difficult times,” Mills said. ‘This work can and must continue as we get shots into arms and get our economy back on track.”
A summary from the state’s Revenue Forecasting Committee shows total revenues for 2021 were revised upward from $3.69 billon to $4.15 billion, or an increase of 4.6 percent. The forecast also suggests increases in projected revenues for 2022, 2023, 2024 and 2025.
The June 2019 forecast did not anticipate the robust response to the COVID-19 pandemic from the U.S. Congress, which not only helped prop up state government, but also has filtered billions of dollars directly to Maine businesses and consumers in the form of direct payments and forgivable Paycheck Protection Program loans.
The state’s current two-year budget, pegged at just over $8 billion, is set to expire on June 30. A new $8.3 billion two-year spending plan – approved by majority Democrats in the Legislature in March – is already set to take effect. That package was blasted by minority Republicans, who labeled it a sham and incomplete.
The revenue windfall announced Tuesday will trigger a new supplemental budget, Mills said, noting that her office had begun working on that proposal.
“We will continue to invest in the health and well-being of Maine people, in our kids and our public education system, and in our economic recovery – all of which will help us turn the corner on this pandemic and build a stronger state for future generations,” Mills said.
Although critics complain of overspending, Mills’ administration has steadily added to the state’s budget stabilization or so-called “rainy day” fund, growing it to $267.9 million, or $50 million more than when she took office in 2019.
Send questions/comments to the editors.
