The state’s revenue forecasting committee says Maine’s economy is improving more quickly than expected, and that’s translated into higher-than-projected tax revenues. But the state is still facing red ink, and without additional federal stimulus aid that will require budget cuts.
The good news from the committee is that revenues so far this budget year are up by $146 million over projections. And while forecasters expect that trend to continue, they warn that the pandemic could stall the recovery.
“Cautiously optimistic that things are bad but not quite as bad as we had anticipated in the summer,” says Mike Allen of Maine Revenue Services, who chairs the committee.
Allen says without additional federal stimulus aid that has nearly run out, many Mainers will lose unemployment benefits and businesses will feel that impact as they try to recover. And Allen says despite the higher revenues, the governor and Legislature will still face a gap between expected revenues and current program costs of over $400 million in the upcoming two-year budget.
“Certainly without another stimulus with a rise in the pandemic there is a lot of risk over the next few months. But we think we have been cautious enough in our assumptions,” he says.
