3 min read

AUGUSTA — Lawmakers got some good news from the revenue forecasting committee Monday. During the rest of the two-year budget cycle, the state can expect about $49 million more than was forecast. The bad news is that it is well short of what is needed to bring the budget into balance for 2013.

“Most of that is sales taxes and the corporate income tax doing better,” said Mike Allen, chairman of the committee and the Associate Commissioner for Tax Policy at Maine Revenue Services.

He said $43 million of that will be realized this budget year — which ends June 30. The special re-forecast was the result of nearly $14 million in revenues from January that were not accounted for until March, he said. It was a human error at Maine Revenue Services.

“When those revenues are accounted for you can see the continued growth every month in the sales tax,” Allen said. “We are seeing growth, but it is very slow growth and that is reflected in our report.”

Although there is another day for April revenues to be processed, it is clear that the month will end with several million dollars above estimates, mostly due to sales tax receipts about $14 million above estimates, he said.

“We did not have any April surprise, good or bad,” Allen said. Because of the April filing deadline for personal income taxes, there have been years in the past when revenues have been well below estimates and years when they have been well above estimates. This year the individual income tax line is about on target for April, but the group expects slower growth in budget year 2013, he said.

Advertisement

“Remember, we have some substantial tax cuts taking effect next year,” he said. “That slows the growth of the income tax.”

Members of the Appropriations Committee were briefed on the re-forecast and said it was good news but that it didn’t make the 2013 budget problems disappear.

“It doesn’t solve the entire budget problem so we have some serious work ahead of us,” said Sen. Richard Rosen, R-Bucksport, the co-chairman of the committee. He said the 2013 Medicaid budget shortfall is pegged at $82.5 million, but that could change as the panel reviews the impact of the eligibility findings from the Department of Health and Human Services on the various components of the budget.

He said the supplemental budget also may include other items, such as addressing the two line item vetoes by Gov. Paul LePage in the previous supplemental budget. He eliminated appropriations for expected losses of federal funds for psychiatric hospitals and General Assistance because he disagreed with the amounts, not enough for hospitals and too much for General Assistance.

“Some of us want to revisit the disproportionate share issue that affects the psychiatric hospitals,” Rosen said. Others on the panel wanted to restore funding for the General Assistance program the governor vetoed.

“We are still sorting through the numbers that were brought to us Friday on the ineligibility issue,” said Rep. Peggy Rotundo, D-Lewiston, the Democratic leader on the panel. “We are working with the staff of OFPR (Office of Fiscal and Program Review) to make sure these numbers are accurate as we start work on the 2013 supplemental budget.”

Advertisement

She says many of the governor’s proposals to reduce Medicaid coverage are “toxic” to members of the Democratic caucus and that those discussions will be very difficult for the committee.

“We have a lot of negotiating to do,” she said. “There are a variety of very challenging issues before us that have to be worked through.”

Not all of the revenue re-forecast was good news. The projected revenues for the Highway Fund were reduced by $3.2 million in each year of the budget as high gasoline prices are reducing gasoline purchases. That reduction also projects less revenue from fees related to motor vehicles, like registration fees.

“We don’t see that improving, and we have projected that down out into 2014 and 2015,” Allen said.

He said some other minor sources of revenue were projected up or down, but has little impact on the overall number.

Tagged:

Comments are no longer available on this story