$93.5M surplus in Maine revenue for FY24 reflects downward trend

FILE PHOTO / Courtesy PIXABAY Maine ended FY2024 with $93.5 million in surplus revenues, reflecting a downward trend consistent with flattening revenues.

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By Laurie Schreiber

Maine ended its 2024 fiscal year with $93.5 million in surplus funds, reflecting a downward revenue trend, according to the Department of Administrative and Financial Services.

At the end of FY 2022, the surplus peaked at $595.1 million, following several years of strong growth. For FY 2023, the surplus was $141 million.

The trend is expected to continue. In March, Maine’s Revenue Forecasting Committee projected that money the state takes in would remain relatively flat through fiscal years 2026 and 2027.

While the surplus demonstrates the state’s good fiscal health, the numbers warrant a close eye, DAFS Commissioner Kirsten Figueroa said in a news release.

“With revenues flattening, we will work closely with the Legislature in the coming years to ensure that spending does not exceed available resources and that we continue to remain in the black,” said Figueroa.

Gov. Janet Mills and Figueroa have urged fiscal restraint and called for a cautious approach to the state budget, according to the release.

“My administration will continue to keep a close eye on revenues, recognizing that they are leveling off, and work to ensure that the state remains on sustainable, solid fiscal footing in the years to come,” said Mills.

The Revenue Forecasting Committee is expected to meet next in December.

Mills noted that state priorities for the additional state funds include making child care more affordable and transportation.

According to Maine state law, when year-end revenues exceed projections and result in a General Fund surplus that is not appropriated, those funds are allocated to certain accounts, in order of priority, through a process known as the “cascade.”

The accounts and amount of funding distributed, in order of priority as defined in statute, are:

$2.5 million to the Reserve for Operating Capital
$110,677 to the Governor’s Contingency Account (to restore to it to statutory maximum of $350,000)
$1 million to the FAME Loan Insurance Reserve
$2 million to Retiree Health Insurance
$12.9 million to the Maine Child Care Affordability Program.

After priority transfers are met, Maine statute requires that the remaining General Fund surplus funds be divided, 80% and 20%, between the Budget Stabilization Fund, also known as the Rainy Day Fund, and the Highway and Bridge Capital Fund.

The 2024 fiscal year-end balance of the Rainy Day Fund is $968.3 million. The fund remains at the statutory maximum for the fiscal year, so no funds were transferred through the cascade. Therefore, the nearly $75 million in remaining surplus was transferred to the Highway and Bridge Capital Fund.