State revenue forecast expected to exceed pre-pandemic numbers
Photo / Maureen Milliken
Gov. Janet Mills and state officials say that the Revenue Forecasting Committee will release numbers this week that are higher for this fiscal year and the next than what was expected pre-pandemic.
The state's General Fund revenue is expected to exceed pre-pandemic forecasts, with an upgrade by the state Revenue Forecasting Committee of an estimated $922 million for this fiscal year and the next.
The projected increases of $461.9 million for the year ending June 30 and $460.5 million for 2022-23 surpass what had been forecast before the onset of the pandemic by about $141 million — $83 million for this fiscal year and $58 million by the next one.
The Revenue Forecast Committee meets Wednesday and has a deadline of Saturday to release a forecast, and is expected to adjust revenue expectations for the General Fund upward by an estimated total of $1.35 billion from now through FY 2025, according to a news release from Gov. Janet Mills' office. The committee is responsible for projecting revenues that the administration and Legislature use to determine the state’s budget.
Mills and state officials attribute the improved forecast to sound fiscal management, curtailment measures and $8.3 billion in federal relief money that has come into Maine since the pandemic began. Mills said in the release that she will submit a supplemental budget in the coming weeks based on the increased numbers, an addition to the $8.34 billion biennial budget for FY 2022-23 she signed last month
“We will continue to invest in the health and wellbeing of Maine people, in our kids and our public education system, and in our economic recovery – all of which will help us turn the corner on this pandemic and build a stronger state for future generations," Mills said.
After the onset of the pandemic, the Legislature set aside more than $106 million in the General Fund and state government was told to hold down expenses, freeze non-emergency hiring, to initiate and maintain curtailments and to maximize federal money. But state departments were also asked to protect services that support Maine people hit hard by the pandemic.
The $8.3 billion in federal relief funding includes enhanced unemployment benefits, stimulus payments, expanded food and housing assistance and direct funding to the state to to protect essential public services
“That state revenues have not only returned to pre-pandemic levels but have surpassed those estimates is a testament to the power of the federal stimulus, our prudent fiscal management of the state budget, the resiliency of Maine businesses and workers and our focus on keeping Maine people and our economy healthy,” Mills said Tuesday.
“As a result, we have managed to hold the state budget steady while ensuring a robust public health response, protecting essential health care and life-saving services, supporting public education, and providing relief for Maine families and businesses most in need during these difficult times. This work can and must continue as we get shots into arms and get our economy back on track.”
Kirsten Figueroa, commissioner for the Department of Administrative & Financial Services, stressed the fact that the state curtailed, rather than cut, programs and services.
"Throughout this public health emergency, this administration has protected Maine’s safety net infrastructure, preserved critical programs and avoided layoffs of state personnel," Figueroa said. "Our commitment to the fiscal stability of Maine and the lives and livelihoods of Maine people continues, and will be a cornerstone of a forthcoming supplemental budget proposal.”
Foot on the gas
Sarah Austin, tax and budget analyst at the Maine Center for Economic Policy, in a statement in response to the improved revenue outlook, urged the state government to continue to focus on people and communities.
“Our improved revenue picture is a story of what’s possible when policymakers take bold action to address the challenges that affect all of us," Austin said. she said. Citing the federal money that came into the state, Austin said, “It’s safe to say that absent that bold policy intervention, the bottom would have fallen out of Maine’s economy.
She urged the state to "continue to apply the lessons of the past year into the future."
"When policymakers act boldly and decisively to invest in people and communities, we can improve people’s lives. Additional revenue means we can keep our foot on the gas, to keep making investments for a more secure, healthy, and equitable future for all Mainers," Austin said.
In addition to a supplemental budget proposal in the coming weeks, the Mills administration will submit a bond package to the Legislature that Mills previewed during her State of the Budget address in February. With the passage of the American Rescue Plan Act in March, her administration is considering whether parts of the bond proposal can be replaced by federal money.
The administration is also putting together a separate proposal that would dedicate unearmarked one-time federal funding from the American Rescue Plan for targeted workforce, economic, and infrastructure investments to accelerate Maine’s economic recovery, the release said.
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