State Revenues Come in $27 Million Above Estimates
AUGUSTA, Maine — After years of slow growth, state revenues took a notable turn in December, coming in nearly $27 million above estimates.
But the windfall coincides with a rising number of spending requests.
Last fall revenue forecasters relied on a conservative forecast — that Maine’s economy was growing slowly and state revenues would reflect that. But in the first month of the new forecast, Finance Commissioner Richard Rosen says all of the key sources of state revenue were significantly above projections.
“It was strong because we saw it on all fronts — individual income tax, sales tax collections, corporate — and so the underlying economic health is showing,” he says.
Rosen says the details of the December figures would indicate that the state economy is growing. Individual income tax withholdings, for example, are up by more than 7 percent over a year ago. Sales taxes from cars and trucks were up over 11 percent over the previous quarter, and sales tax revenue from building supply stores is up over 11 percent from a year ago.
“So there really is an indication there that Mainers are benefiting from these extraordinary low energy prices and that is translating into consumer activity and buying,” Rosen says.
And he says that trend is continuing, based on January’s preliminary revenue numbers.
Rep. Peggy Rotundo, a Lewiston Democrat who co-chairs the Appropriations Committee, is encouraged by the revenue improvement, but points to several proposals from the LePage administration that will come at a cost.
“That is very good news, but when you have a price tag of over $40 million for the tax conformity bill that he has brought forward, and there will be a large bill on this latest request he is making,” she says. “That money in the forecast goes pretty quickly.”
The “latest request” is the governor’s comprehensive proposal to address the state’s drug crisis, which he acknowledges will costs millions of dollars. LePage has also proposed other bills with significant costs.
Rotundo and co-chair Sen. Jim Hamper, a Republican from Oxford, are asking that all new spending requests from the administration be sent to the committee so that it can work to set priorities.