Maine tax revenues are rosier than expected, state officials say
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Maine tax revenues are surpassing economists' projections, which were scaled back last summer because of the pandemic.
Maine is weathering the current economic crisis better than expected, according to the state’s latest revenue projections.
The Department of Administrative & Financial Services on Thursday reported that General Fund revenues in January surpassed forecast levels by 25%, or $89.5 million, and that revenues since July exceeded estimates by 6.6%, or $154.3 million.
The Maine Revenue Forecasting Committee downgraded its predictions last year after the pandemic began, but perhaps were too bearish.
Even after adjusting for a new increase in revenue sharing to local cities and towns, the General Fund amount was up 4.7% over the same seven-month period in 2019-20. Revenue sharing increased from 3% to 3.75% for this fiscal year, sending an additional $20.3 million so far to municipalities and an increase of $2.2 million in January.
While tax receipts from restaurants and lodging were down 26% from the levels a year ago, overall taxable sales in January still brought in a 12.7% revenue increase to the state, according to the DAFS.
Tax revenue for the month grew in some sectors, compared to January 2020:
- Consumer sales tax revenue grew by 12.5%
- Auto and transportation, 16.9%
- Other retail sales, 23.6%
- Building supplies, 37.7%
- Business operations, 21.6%.
Greater receipts from individual and corporate income taxes also contributed to the heavy cash flow, the DAFS said in a news release.
Income tax receipts in January exceeded projections by 29.4%, or $59.1 million, and were up 7.1% on a year-over-year basis. “This is the strongest performance in this category since 2012,” DAFS said.
Corporate income tax receipts were above projections by $7.9 million for the month, or 13.2% compared to last year. DAFS Commissioner Kirsten Figueroa said that performance may be attributable to businesses reforecasting revenues upward, then backfilling lower quarterly payments made at the onset of the pandemic.
Some advocacy groups are already pushing the Maine Legislature to find new uses for the state's bounty.
Figueroa commented on the results: “While current revenues are still below pre-pandemic estimates, they have, so far, outpaced our downgraded expectations. We will continue to closely monitor the state’s fiscal health, prioritizing Maine’s pandemic response and the programs crucial to Maine people during these times.”
The state bases its revenue projections on periodic reports by two independent, nonpartisan bodies, the Consensus Economic Forecasting Commission and the Revenue Forecasting Committee. They are required to release reports next on April 1 and May 1 respectively.
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