(The Center Square) — With federal pandemic aid drying up, Maine is expected to see only a slight revenue boost over the next year, according to a panel that helps craft the bi-annual state budget.
A new nonpartisan Revenue Forecasting Committee report says Maine will see “modest revenue growth” and take in another $265 million during the current two-year budget cycle. The panel said Maine’s overall finances are in relatively good shape, with the state’s reserves or “rainy day” fund at nearly $1 billion.
Maine’s Finance Commissioner Kirsten Figueroa said the Mills administration “welcomes” the additional growth as federal COVID-19 pandemic relief is largely drying up.
“Looking forward, the administration will work with the Legislature to ensure the continued funding of programs previously approved by the Legislature and maintain the State of Maine’s fiscal stability over the long-term,” Figueroa said in a statement.
The panel said Maine’s boosted 2024 economic outlook is based on strong year-to-date growth in wages and salaries and lower inflationary pressures.
Maine ended the previous fiscal year in the black with a surplus of about $534 million, roughly 11% over the state’s initial estimates, according to the report.
That allowed the state to squirrel away another $400 million in its reserve fund, bringing its rainy day fund to $896 million, about 16% of the general fund revenues for that fiscal year.
Gov. Janet Mills and lawmakers used a more than $400 million surplus last year to pay for $750 relief checks for more than 800,000 taxpayers in the state. They also tapped the surplus revenue to fix roads and bridges, boost spending on public education and pump more money into the state’s retirement system.
But the revenue forecasting committee raised concerns at the time about the impact of inflation and energy costs, warning that the state’s overall economic outlook remains “uncertain” going forward.
Under Maine’s Constitution, the state is required to have a balanced budget. That means the panel’s latest revenue adjustments are expected to prompt Mills to submit a supplemental budget for the Legislature’s consideration before its next session in January.