AUGUSTA, Maine - State revenues failed to meet projections in August by $3.4 million. The state’s largest sources of revenue, the state sales and income taxes, both failed to meet expectations.
Finance Commissioner Richard Rosen cautions against attaching too much significance to the numbers.“I don’t think you can draw any negative trend from the monthly figures,” he said. “We see we are below projections for the month.”
He said that after two months of the new budget year, overall revenues are above estimates by $4.5 million.
But, Rep. Jeff McCabe of Skowhegan, the Assistant House Majority Leader said Democrats are uncomfortable that income tax withholdings are below projections for the second month in a row. He says that’s an indication that wages are not growing as expected.
“For the second month in a row it is down,” he said. “So looking to next month, we hope it will go up. But the trend is not following the national trend or the New England states trend.”
Rosen said that while individual income tax withholdings have been under projections for both July and August that may be the result of an accounting problem. Individual income tax withholdings are now $8.9 million below estimates for the budget year.
Rosen said even with the disappointing August revenue numbers, he believes there are indications the economy is rebounding. He said sales taxes for the auto and transportation sector went up by 4.2 percent over a year ago after a seeing a 17 percent increase in the previous year.
“ So, that’s impressive behavior I think on the part of the consumer,” he said.
McCabe said when revenues for this month are reported in October, lawmakers will have three months of results. He said that will provide a better handle on whether estimates made last spring will hold up or will need to be adjusted.
