AUGUSTA (AP) – A looming state surplus that could exceed $50 million is attributable in large measure to unanticipated sales and income tax revenue, according to the Baldacci administration.
Officials last week said preliminary closeout figures for the fiscal year that ended on June 30 suggest the sales and use tax line was running ahead of the latest estimate by $11.5 million.
The income tax line was even stronger, bettering projections by an estimated $25 million.
Also up, by an estimated $8 million, was the corporate income tax line, officials said.
The Baldacci administration noted that all year-end information was not yet available and that adjustments may be made over the next couple of weeks.
In a general overview, administration officials said in a statement that the Maine economy “appears to be on a slow but steady growth path and is tracking the national economy well.”
A statutory formula would channel about $16 million into a budget stabilization fund and the same amount would go toward the unfunded actuarial liability of the state retirement system, if a surplus in the $50-million range is realized.
A surplus of the size now anticipated would also allow for the allocation of an additional $850,000 for the University of Maine, $350,000 for the Maine Community College System and $2 million for an economic improvement fund. Moreover, the General Fund could carry forward $4.5 million, officials said.
Farther down the road, however, state government is looking at an estimated gap between spending demands and anticipated revenue of about $785 million in the next budget cycle, plus the cost of implementing a major school funding increase approved by statewide voters last month, according to Baldacci administration budget chief Rebecca Wyke.
In the current two-year budget cycle, the governor and lawmakers have been working to offset a structural gap of about $1 billion.
AP-ES-07-03-04 1245EDT
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