Revenues for state still down
State

Revenues for state still down


By Kevin Miller
BDN Staff

AUGUSTA, Maine — Like most weather reports so far this summer, Maine’s economic forecast for the next few months can be summed up with one word: dreary.

On Thursday, members of the Legislature’s budget committee received another gloomy forecast when state officials warned that revenue flowing into state coffers in June was $35 million less than projections made just a few months ago.

That brings the revenue shortfall for the fiscal year that ended June 30 to about $50 million, according to preliminary figures released Thursday. And the near-term outlook isn’t much brighter as the tourism industry — the state’s primary economic engine — struggles to cope with one of the rainiest seasons on record.

“Not surprisingly, we are expecting a difficult month again next month largely due to the weather,” Ryan Low, commissioner of the state Department of Administrative and Financial Services, told members of the Appropriations and Financial Affairs Committee.

Technically, state government finished the fiscal year that just ended in the black. That’s because emergency legislation allowed finance officials to tap into reserves that had been included in the 2010-11 budget. But it means that the state began the new biennium in the red.

If the current trend continues — and it shows little sign of changing course — the committee and Gov. John Baldacci’s administration will have to identify at least $80 million in savings over the biennium that began July 1. The committee was already charged with plugging a $30 million hole that was built into the 2011 fiscal year budget.

That prospect prompted committee co-chairman Sen. Bill Diamond, D-Windham, to urge his fellow lawmakers to begin thinking about major cuts.

June revenues were down in most major categories.

Sales and use taxes appear to be 3 percent, or about $5 million, below projections, according to the estimates released Thursday. May’s revenues, by comparison, were down $3.3 million.

The biggest hits appear to be in corporate and individual income tax revenues.

Individual income taxes were 12.7 percent — or $23.5 million — below projections in June, bringing the year-to-date shortfall for that one category to $39.5 million. Once again, that is significantly more than the losses reported in May.

Corporate tax returns for last month, meanwhile, missed the mark by 26 percent, or $9.2 million.

“So the trend is not going in the right direction,” said Rep. Patrick Flood, R-Winthrop.

Low was asked whether there were indications about how long the slump will continue.

“We are very concerned that it is a trend,” Low responded. “We’re not there yet. We’d like to see the July revenues first and get through the bulk of the tourist season.”

Absent a dramatic turnaround, however, the committee will have to make even deeper cuts to a $5.8 billion state spending plan that was already $500 million smaller than the previous budget.

Lawmakers already have slashed funding for programs across state government. Cuts included $50 million less in state aid to local schools in fiscal year 2011 and reduced tax benefits to people who participate in the Circuit Breaker and Homestead Exemption programs.

Earlier this week, the vast majority of state workers were ordered to stay home without pay during the first of 10 government shutdown days planned for the fiscal year. Ten shutdown days also are planned for next fiscal year.

Rep. Emily Cain, co-chair of the Appropriations Committee, agreed with Diamond that the latest projections likely will force lawmakers and the Baldacci administration to make additional difficult decisions.

“That’s all the more reason to have the tough conversations sooner rather than later,” said Cain, D-Orono. “We can’t wait to talk about uncomfortable things.”

The committee is scheduled to begin work on identifying additional savings in the budget on July 22 and 23.

David Farmer, the governor’s spokesman, said the administration would work with the Appropriations Committee to identify savings and suggest structural changes within state government. Baldacci also is reviving the Governor’s Council on Competitiveness and the Economy to act as a sounding board for possible cuts.

But Farmer said the governor will not support raising taxes or undoing the recently enacted tax reform bill, which lowered income taxes for most Mainers while broadening the sales tax base.

“We’re not going to look at broad-based taxes to balance the budget,” Farmer said.

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Comments
38 comments on this item

After the 2010 Elections look for the income tax rate to go back up to 8.5% or higher. Now that they have got our money from the sale tax. They will keep that and expand it and then say they need more money and up goes the income taxes. Oh and they will also ask for more bonds to fix the roads so they can steal more of that money and not fix the roads! We are screwed! As for Baldacci saying he will not have Broad based taxes. Yeh right he has lied so much now it is unreal. We have heard him say the same thing time and time again and every time he has let taxes go up!

Thats right, blame it on the weather.

What did you expect Baldy, we are in the middle of a Depression. People fearful of losing their jobs are not going to drive hundreds of miles to Maine and spend thousands to eat in restaurants and sleep in motels. Better readjust your budget Baldy, it's going to get a lot worse.

Baldacci screws it up again. Thanks for Dirigo healthcare and the school and prison consolidation. The money from these projects could have gone towards economic development, not wasting money.

Hey, it could be worse.

California has a 26.3 billion budget deficit.

Maine troubles dont seem so bad now.

Best way to kill a tumor -- cut off its blood supply.

As soon as BALDY and his henchmen are out of office, then the revenue will go up because a REAL Governor shall be elected by the masses.

Time to cut more wasteful programs!

Gee I thought there was an article in the Bangor Daily about finishing the year in the black. Guess I read something wrong.

Just keep raising the gas and sales tax .

Hello Mr. Baldacci, are you awake in there yet? You can't keep ignoring the real problems within Maine State Government; it's just too big and expensive. It's time for some major cuts in programs and related job positions. It's time to cut!

If you recognize this problem and are will to help implement positive change within our state government, please join Maine Taxpayers United at www.MaineTaxpayers.com, and now on Facebook. We are a grassroots organization with a good mission: "To reduce the Maine tax burden and promote prudent government spending." It's time for action in Maine.

Give all those on welfare money to move to an other state!!!!

Maine should become the first real socialized state in the union. No one should work, everyone should be subsidized by the state. No taxes for anyone but those who come to Maine to spend their money as tourists. The politicians should not be paid and should be given the same as the citizens. No state or govt employees will get any benefits that the other citizens don't receive. Don't make Maine business friendly, tax the heck out of them. Maine doesn't need businesses to be able to function. Let's show the rest of America we can do it! Drive businesses out and let us have a complete state of nothing. This is what you voted for folks, so don't complain...live with it and say THANK YOU!

ONE PROBLEM IS TO MANY PEOPLE IN STATE GOVERMENT ARE WAY OVERPAID AND RECEIVE TO MANY BENIFETS. ANYONE MAKING MORE THEN THE GOVONER SHOULD BE SCALED BACK TO ONE DOLLOR BELOW HIS PAY. THEY ARE NOT SKILLED JOBS AND THEY PRODUCE NOTHING. OUR SCHOOL ADMINASTRATIONS ARE NOT PRODUCING IF THEY WERE ALL OUR JOBS WERN"T BEING SENT OVERSEAS WHERE PEOPLE ARE SMARTER AND RECEIVE BETTER EDUCATIONS. THEY RECEIVE WAY TO MANY BENIFITS AND HAVE WAY TO MUCH TIME OFF. THEY HAVE MADE THEMSELFS LAZY.

I'm sure I'll take some heat for this suggestion, but when I'm in a budget crunch of my own, the first thing to go are the non-essentials. The state is in the red - do we really need new flags this year? Especially a double order from years past? What else are we buying that are non-essentials? Do we need flags or do we need to keep the lights on?

Keep raising the gas tax. Keep raising the hotel tax. Raise those non resident fishing and hunting license fees.

Tax more candy, shoes and clothes and don't forget about the tax on auto repairs.

Raise the tolls and let the roads go unrepaired.

Then cry about no tourists tourists showing up and that the state is going to have a 100 million dollar plus revenue shortfall. Why? Because you are trying to tax and fee your number one industry to death.

Yeah, thats it. Tax and fee the tourists and the Maine working class to pay for those who refuse to work. Then wonder why people aren't spending the money they used to have because it is now going to pay all the new taxes and fees .

Baldacci and the rest of the Augusta democrats are just taking it out of the working classe's pockets and the fewer tourists that show up and hand to the welfare cheats.

I'm sure that lady who left her husband in the wheelchair and can't work because she has a stress related disability....it was stressing to care for him......will get an increase on her monthly taxpayer funded dole.

What a joke. There is no fiscal responsibility in the statehouse. Yet, nobody I know or talk to voted for Baldacci. Now why is that? Maybe because nobody I know or talk to is on the public dole.

I am not against a safety net for those truly in need.

I am against state subsidies for those who are able bodied and refuse to work and those who have multiple children out of wedlock in order to maintain and grow their benefits.

Guess all that stimulus money stimulated a tax and fee increase in Augusta.

once again your blaming good ole john,he didnt do this the people who voted him in did.peace

I still have my Woodcock sign, where should I put it?

I couldn't agree more CarlyMC and Ronfromdowneast - It's about time the TAXPAYERS of this state take a stand and vote ALL democrats out of office - they have destroyed this state and ENCOURAGE people to get welfare.

I, too, am NOT against "safety net" programs. But far too many people of this state that are able-bodied are bilking the taxpayers and why should we support young girls AND women who choose to bring children into this world they KNOW they cannot AFFORD.

This state LOVES to spend our money. How about sending some state employee's out to check out the half of the state getting assistance. I would be willing to bet it wouldn't take too many visits to find someone "disabled" who really isn't and "single" women that have the father of one of their children living with them on OUR dime (no, I should say - THOUSANDS OF DOLLARS a year).

It's not only democrats but some republicans as well.....Although I'm a registered republican Im disappointed in Snowand Collins........they've lost my vote. A true conservative business person gets my vote

if you think he is a bad governor you should have tried the food at the familys restaurant AWFUL

If we became the first state to legalize and tax cannabis, we'd be flooded with tourists and revenue.

Of course the legislature would find a way to pi$$ all that new money away...

We used to go there all the time and it was pretty good, but then again I think that was when I considered him a 'pretty good' governor...it's been a whhhiiiilllleeee.

harley 07 they would only use to buy cigs and drugs and booze and not move bad idea

The major problem in Maine is the welfare and TANIF money that literally draws people here from out of state. Ask any police officer about their dealings with the "welfare culture" that has taken over Maine. There needs to be limits on how longs someone can recieve benefits, there isn't one. Maine is the best state to live for anyone seeking "free" money. I think the only time that these people actually apply themselves is when they go out to vote.

Fishfood is correct, welfare fraud is rampant. Here's an intersting tidbit from a fellow blogger posted a couple of days ago:

On 7/8/09 at 6:20 PM, leumas wrote: Repeated separate thumbs down will cause comment to be hidden

The people of Maine need to learn how to file for unemployment, welfare, housing subsidies, heating oil allowances, etc. Leave these Canadians alone, they are just trying to make a living! Same thing in Southwest USA... they are just taking jobs Americans won't do....like H.V.A.C. $35. per hour....Electrical ..$40 per hour, road construction $15.- 38. per hour. Damn, you Americans are either lazy or unwilling to work for $30. to $50 dollars per hour! Of course we Mexicans and Canadians,don't actually pay any taxes whatsoever and we still get U.S. social security and free college tuition....don't wanna make you jealous but it sucks to be you!

Can you believe the audacity? And to think the libs encourage this!

..that is depressing..

Baldy couldn't cook a decent plate of spaghetti much less run the State.

Attention all former Maine citizens.....I'm over the hill but still need to work. Where's the best place to move that isn't taxed to death like Maine and will hire (almost) senior citizens?

SoFedUp - New Hampshire is good, Texas is awesome if you can stand the heat...Florida has no income tax but their economy is tanking.

Maine has seen its best days.

You are the state which possesses the eastern most international airport in the country - BIA. An airport which, inexplicably does not process cargo, despite it having full service for such an operation. No "east to west" highway to facilitate travel, just a highway infrastructure which focuses solely on bleeding business south. No focus by your elected officials to move forward...they just keep on playing with the same, old pieces of the puzzle, trying to make it all work somehow. The State of Maine, the people and the officials they elect, need to take advantage of the most basic asset they have in the business of international commerce. Location. Until then, Maine will continue to be one giant state park which is tended by a population of poor, miserable taxpayers solely for the benefit of wealthy, out of state, VIPs.

redsoxrule, I think I love you.

SoFedUP: Arizona. Hands down.

SoFedUP: Bring your own grass.

I believe true mainers understand goverment and what changes are needed this November. The biggest problem is we are outnumbered at the polls by Mass liberals moving here. Next is welfare. Needs to be reformed. So problems will continue. I love this state and where I live but truly thinking about selling everything, business included, and moving. I'm tired (and I think many others that are self-employed) of getting p***ed on.

It's time for some real & deep spending cuts within the Baldacci Administration...let's start with those 20+ overpaid "Governor's Special Assistants" that are sucking up a fair amount of tax dollars. The political games with our tax dollars need to stop!

stop the lifelong government pensions (and double dipping of pensions) and the lifelong health insurance and make gov officials pay into social security. make them truly be public servants. Instead of making the working class/small business people be government servants.How did we ever get to this place?

SoFedUp,

Move to alaska. I did. No income tax, no sales tax and depneding on the oil revunue the state pays all citizens of Alaska anywhere from $1000 to $2500 per year to be here. Sure it is cold here in the winter but so is Maine. It only costs $100 every 2 years to register a vehicle no matter how old or new. No vehicle inspections, guns and ammo are still in expensive, everyone owns one. Sure it is dark in the winter but you get 22 hours of sunlight in the summer. People are still friendly and neighbors help neighbors. It is pretty much the way maine used to be years and years ago. I visit Maine every summer and will be there at the end of this month. But rest assured I will be budgeting my money. I used to spend anywhere from 7-10K for the 1 1/2 months I was there, this year it will be the bare minimum, spend more time with family, more cook outs and less eating at restaurants and no rental car this time. I am going to rent my nephews car from him, that way he gets my money and not old baldy and his cronies. I left Maine 6 years ago and it is the best move I have ever made. I have absolutely no regrets. Now all of my brothers and older nieces and nephews are considering the same move and I do not blame them one bit. So any of you mainers thinking of moving, consider Alaska. For you welfare spomges you can forget it, you have a limit on benefiets, then you are on your own. See you all in a few weeks.

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