AUGUSTA (AP) – The latest monthly update from the Baldacci administration casts the state economy as continuing to hold steady in the shadow of national economic growth.
“Revenues are tracking the most recent forecast and should continue to do so over the first half of fiscal 2004,” Commissioner Rebecca Wyke said in a report released Wednesday by the Department of Administrative & Financial Services.
Wyke noted that the current revenue forecast assumes that stronger growth at the state level will not begin until early next year.
The report found consumer sales grew by 4 percent in June, bolstered by strong auto/transportation sales.
It also noted that the Bureau of Economic Analysis estimated that Maine personal income grew by 1.2 percent between the fourth quarter of 2002 and the first quarter of 2003, making Maine’s personal income growth during that period the 18th best in the nation and fourth best in the Northeast.
While the U.S. economy grew by an estimated 2.4 percent during the second quarter of 2003, that rate remained below the level needed to create jobs, according to the state report.
However, “growth in the second quarter was well above the 1.4 percent growth rate of the previous six months,” Wyke’s report said, adding that most analysts are forecasting economic growth in the range of 3.5 percent over the second half of 2003.
“With tax cut checks just starting to be mailed by the federal government, the economy may get the additional boost it needs to grow at the rate needed to start creating jobs again,” the administration report said.
For the state, General Fund revenues for the month ending June 30 were ahead of budget by $15.9 million, or 4.3 percent.
Officials said most of the monthly surplus was attributable to stronger than projected individual income tax receipts, with individual income tax withholding and estimated payments both up by about $6.5 million.
“While both of these revenue sources reflect current economic activity, it’s likely that the income tax surplus in June is the result of the timing of tax receipts rather than the economy performing better than expected,” the report said.
Maine’s unemployment rate in June was 4.4 percent, which was down barely from 4.5 percent in May and up barely from 4.3 percent in June 2002.
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