Maine’s state revenues expected to rise but Governor Mills warns of ‘tight’ budget

A nonpartisan state committee is expected to increase Maine’s general fund revenue forecast by about $202.2 million over the next two years, the state announced Monday.

In a statement made by the Maine Department of Administrative and Financial Services, it was stated that the Revenue Estimate Committee granted an additional one-time money of $247.9 million for the current fiscal year.

But the income adjustments follow a recent development report The department is projecting a structural budget deficit of $636.7 million between revenues and expenses over the next two years, and Gov. Janet Mills is warning that the next state budget “will be tight.”

The additional money for this fiscal year is a result of a delay in revenue collections due to extended tax return filing deadlines by the IRS and Maine Revenue Service following last winter’s extreme storms, as well as significant interest earnings on the state’s cash pool.

The updated forecast, despite the increases, represents a stabilization in revenues after years of rapid growth in the immediate aftermath of the COVID-19 pandemic, underscoring: Preliminary warnings from Mills The ministry said revenues were fixed and budgeting should be done responsibly.

Maine’s constitution requires a balanced budget; This means that anticipated revenue adjustments and structural hole considerations will prompt the Governor to submit a supplemental budget for fiscal year 2025, as well as a two-year budget proposal for 2026 and 2027 when the Legislature meets in January.

“These projected revenues should not be viewed as an opportunity for significant new spending,” Mills said in a statement. “As my administration has repeatedly warned, the next budget will be tight, and those revenues should be used to cover our existing obligations, such as 55% of education, municipal revenue sharing, and health care, rather than creating new programs.

“By January, I plan to present a lean budget proposal that will deliver on these existing commitments to the greatest extent possible, while new investments will be severely limited.”

Maine experienced significant revenue growth during the pandemic, but general fund revenues have since stabilized and grown at a more limited and modest rate compared to growth during the pandemic.

“Our administration has been warning that revenues are flattening and the Legislature should take a cautious approach to spending, which is why the governor proposed saving more than $100 million last session,” said Kirsten Figueroa, commissioner of the Department of Administration. and Financial Services.

“Although the Legislature did not pass this proposal, budget pressures still exist; Programs continue to create costs while revenues stabilize. Lawmakers will have to grapple with this reality, and we hope they agree with us that the priority should be to continue funding the programs they have previously approved rather than trying to create more. “This approach will be vital for the long-term stability of the budget.”

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