AUGUSTA — Hopes expressed by lawmakers earlier this month that higher-than-projected state revenues associated with the improving economy would help solve budget woes shriveled Friday when new data showed that little has changed from previous predictions.
A panel of experts on the state’s revenue forecasting committee, which met Friday morning, found that although revenues are running about $6 million ahead of budgeted amounts for the current fiscal year, the state is still on track to realize a surplus through the end of the current biennium of about $2.3 million. That’s a small sum compared to the $6.3 billion biennial budget and the tens of millions of dollars in budget shortfalls that the Legislature is currently facing.
“We are a little bit over budget,” said Mike Allen, director of research at Maine Revenue Services. “Relative to the size of the revenue forecast, it’s a very small variance.”
Allen said the state’s revenue picture will become much clearer in the next few months because corporate income tax filings are due on March 15 and the deadline for individual income tax filings is April 15.
Some lawmakers, including Sen. Patrick Flood, R-Winthrop, argued earlier this month that action on a bill to restore $40 million in municipal revenue sharing should have waited until Friday’s revenue data became available.
“It is unclear to me why we would wish to rush this very important decision of using $40 million for one particular and very important use based on relatively old revenue information when on Feb. 22 we’ll have newer, better information,” said Flood, who is a member of the Appropriations Committee.
Rep. Michael Carey, D-Lewiston, who is also a member of the Appropriations Committee, said many lawmakers shared Flood’s hope that revenues would increase.
“We all read the paper and watch the news and understand where we are in this country with the rebounding economy,” said Carey. “We expected things to look better.”
Grant Pennoyer, director of the Legislature’s nonpartisan Office of Fiscal and Program Review, agreed that the new revenue report — the official version of which is due to the Legislature by March 1 — doesn’t include much good news other than the fact that the economy has improved enough to allow financial experts to make better predictions.
“I’m sure some people will be disappointed,” he said. “But the volatility we had in our forecasts as we were going through the great recession has subsided. Hopefully, from now on there will be just modest tweaks in each forecast.”