AUGUSTA, Maine — State revenues exceeded Maine’s projections for the third month in a row in October, but they were down slightly over 2019 and the coronavirus recession is expected to lead to bigger drops as federal stimulus programs run dry.
Revenues were over budget last month by $78 million, or 27 percent, according to a recent report from Department of Administrative and Financial Services Commissioner Kristen Figueroa. It was attributed to federal aid boosting taxable wages and spending, which were the same factors cited when August and September revenues came in above dismal projections.
One of Congress’ major early stimulus programs, an additional $600 in weekly federal unemployment benefits, ran out in July. The state took advantage of an additional $300 under an order from President Donald Trump after that, but the state’s economic officials have warned the temporary boon in economic activity may end if more aid does not come.
Figueroa said that drop could end up hitting one of the more lucrative sales tax- generating periods of the year: the holiday shopping season. There is a delay of more than a month in reporting monthly sales tax figures, so the effects of the cooler months and the majority of Mainers getting kicked off unemployment insurance may not be seen for another few months.
The October report reflects taxable sales in September. Overall, that was down by $4.4 million, or less than a percentage point, relative to the same month last year. Shopping was a bright spot, with consumer sales up 14 percent compared to last year and other retail sales growing by 46 percent because of online shopping during the pandemic.
The sore spots were restaurant and lodging sales, which were down nearly 16 percent and 18 percent, respectively. They are likely to suffer more as a curfew on businesses that sell food and drink announced Thursday by Gov. Janet Mills goes into effect on Friday through Dec. 6.
Figueroa seemed pessimistic about additional federal aid coming through by the end of the year in a memo, noting it may be “delayed until the first quarter” of next year, after President-elect Joe Biden takes office.
Mills, a Democrat, and Maine legislators will negotiate the state’s next two-year budget over the first half of 2021. Times will be hard as the state faces a projected $1.4 billion revenue shortfall over three years. That projection is expected to be updated after Thanksgiving by a state revenue forecasting panel.