AUGUSTA, Maine - As Maine lawmakers enter what's expected to be an intense period of budget negotiations, they got mixed news from the state's Revenue Forecasting Committee.
April income tax revenues were virtually flat, according to the commission, prompting the panel to dampen revenue expectations through June by $17 million. That also led the panel to project an increase in revenues of less than $6 million a year for the next two years.
“That’s the first estimated payment for the 2017 tax year, the tax year that is affected by the surtax," says Associate Finance Commissioner Mike Allen, who chairs the Revenue Forecasting Committee. "And rather than see the increase in the first estimated payments that we thought we would see, it was flat compared to a year ago.”
The surtax he's referring to is the additional 3 percent that is being levied on household incomes over
$200,000 a year that was approved by voters last fall.
Allen says it’s important to note the commission bases its projections on current laws and economic conditions, and that the projection will be changed in response to what lawmakers include in the budget. That process is just kicking into gear with more than three-quarters of the budget agreed to by the Appropriations Committee, but the very tough issue of school funding unresolved.
Appropriations co-chair, Sen. Jim Hamper, a Republican from Oxford, says with limited revenues, lawmakers won't be able to get everything they want. “That will certainly curtail negotiations, you know, because honestly there is one side that is expecting to spend much more than the other side.”
Hamper says Republicans will seek to hold spending to levels included in the governor’s proposed budget.
Co-chair Drew Gattine, a Democratic representative from Westbrook, says he expects his party to defend its spending priorities.
“In the context of a, you know, multi-billion budget it’s - I don’t really think it’s going to change our
positions at all,” he says.
The committee chairs say they want to work on the budget completed this month. A budget must be in place
by the end of June and both expect that Gov. Paul LePage will veto whatever compromise is sent to him.