The Maine Public Broadcasting Network
Listen Live
Classical 24
Search
Maine Ends Budget Year in the Black
07/29/2013   Reported By: Mal Leary

After a year of ups and downs, state revenues improved in the last half of the budget year that ended June 30, with a revenue surplus of $46 million. As Mal Leary reports, unspent balances in various accounts could add another $10 million to $12 million to the surplus when they are finally computed.

Related Media
Maine Ends Budget Year in the Black Listen
 Duration:
2:49

Twice during the budget year, revenues were re-projected down from original estimates. But as the year ended, the personal income tax continued to outpace expectations, ending the year nearly $28 million above projections.

When budget year 2013 is compared to budget year 2012, nearly all sources of state revenue grew year-over-year, except for the corporate income tax - it brought in $60 million less. Finance Commissioner Sawin Millett says corporate taxes were off for a couple of reasons.

"Some of the tax reform components that were put in place for the 2011 tax package did address some corporate incentives, as well as some deductions and so," Millett says. "And so I think that would have to be considered as part of the explanation. But it also is the cumulative reflection on two revenue forecasts."

In both cases, Millett says, the forecasting panel reduced estimates for the corporate income tax. In all, the state collected just over $3.1 billion for the year that ended June 30.

But whether the improved revenues are a trend is not certain. Sen. Roger Katz of Augusta, the assistant Senate Republican floor leader, questioned Grant Pennoyer, director of the Legislature's Office of Fiscal and Program Review.

"I assume that this improvement that we are seeing is somewhat symptomatic of what's going on nationally - that the economy is getting better and other states are experiencing similar - ," Katz said.

"All those states with individual income tax, and the federal government, have seen a substantial bump up," Pennoyer said.

Commissioner Millett says the state's economic growth continues to be sluggish and is still recovering from the recession. "I think there's some slight - or modest, let's say modest - indication of economic growth," he says. "And we hope it bodes well for the future."

Just because there is a surplus does not mean there is extra money to spend. The state budget law takes the first $5.5 million and allocates it for reserve and contingency accounts. Eighty percent of the remainder goes to what is often called the state's "rainy day fund," with smaller amounts for operating reserves and capital construction and improvements.

New to this year's allocation is 7.7 percent set aside for tax relief for Maine residents, an amount estimated to be about $4 million.



ReturnReturn!



Become a Fan of the NEW MPBNNews Facebook page. Get news, updates and unique content to share and discuss:

Recommended by our audience on Facebook:
Copyright © 2014 Maine Public Broadcasting Network. All rights reserved.