AUGUSTA, Maine - Citing an improving economy, Maine's Revenue Forecasting Committee is upping its projections for the current fiscal year, and for the next two years as well.
The committee has re-projected revenues from scores of sources, ranging from income and sales taxes to taxes on gambling, and even revenues from fines. The panel expects about $45 million in additional revenues for the current budget year and about $65 million more over the two-year budget that starts July 1.
"The low energy prices - we just had discussion about that - is certainly helping on the sales tax line," says Associate Finance Commissioner Mike Allen, who chairs the committee. "We think we are going to have a much better holiday shopping season then we have had in the past. And on the income tax side, we have just been seeing stronger revenues than we had projected."
Most sources of state funding are up at least a little or are unchanged. But gambling revenues, both from the state lottery and from the state's two casinos, have been below projections, and the forecast reflects the decline. Allen says the panel isn't sure why gambling revenues appear to be off.
"We talked to other states - states that are heavily dependent on casino revenue," he says. "They are also seeing some declines, so it may just be that, nationally, it has reached some sort of a peak."
Lawmakers are pleased with the substantial increase in projections, given several years of anemic growth. They are facing an estimated so-called "structural budget gap" of more than $460 million in the coming two yars, attributed mostly to the effects of two laws: the long-ignored requirement that the state pay 55 percent of the cost of local schools and the expiration of the sales tax increases that were passed to balance the current budget.
Republican Sen. Garret Mason, of Lisbon Falls, is the incoming majority leader. "The first thing we have to think of is the taxpayers," he says. "Then we can go from there on how best to use those resources, should we use them for programs that need help. We have a lot of issues coming at us in this Legislature."
On that point, Democratic Rep. Peggy Rotundo, of Lewiston, the co-chair of the Appropriations Committee, agrees. She says there is always far more demand to fund good programs that help people than there are dollars to pay for them.
"These are decisions that we will make in a bipartisan way when we come together in January and start to work on the biennial budget," Rotundo says. "So, I think it is premature to say how - what is going to happen with that money."
Associate Finance Commissioner Mike Allen says the projections are based on current tax law, and could change as Congress considers extending several income tax breaks that expired at the end of 2013.
