The state is reporting some good fiscal news following the close of the budget year in June, including a revenue surplus and an increase in cash reserves.
State revenues came in above estimates by over $14 million to contribute to a surplus for the year of more than $28 million. The rest of the surplus comes from money that had been appropriated for various activities but was not spent by the end of the year.
While it is called a surplus, the money is allocated by law for various state programs. Nearly $6 million comes off the top to provide operating capital for the state, increase the loan insurance reserve, help pay down the unfunded liability in the retiree’s health insurance fund, and to replenish the governor’s contingency account.
Finance Commissioner Kirsten Figueroa says the lion’s share of the surplus goes into two funds.
“Eighty percent to the budget stabilization fund, what people might still refer to as the rainy-day fund, which is $18 million, and then the remaining twenty percent goes into what is now the property tax relief fund,” Figueroa says.
That and $4.5 million comes as good news for homeowners. That fund originally was set up to lower the income tax but was changed this year to provide direct property tax relief. By March 1 of next year, the state treasurer will send a $100 check to each of the more than 300,000 Mainers that receive the homestead property tax exemption.
Figueroa says while many indicators point to a continued strength in the economy, the state has decided to set aside money should this long stretch of growth come to an end.
“It makes sense to be cautious about how we are spending, how we are saving, how we are distributing those surplus revenues into our savings accounts in anticipation of what potentially could happen,” Figueroa says. “And the balance we have now in our budget stabilization fund is as high as it has ever been.”
That balance is nearly $239 million.
In addition, the state has set aside just over $60 million to pay back funds drawn from the federal government after it decertified the Riverview Psychiatric Center in 2013 because of operating deficiencies. The hospital regained certification in January of this year, and state officials are negotiating with the feds on what is still owed.
Originally published 4;37 p.m. July 26, 2019