Commissioner Kirsten Figueroa of the Maine Department of Administrative and Financial Services is pictured near the State House in Augusta on Sept. 10. Credit: Natalie Williams / BDN

AUGUSTA, Maine — State tax revenues continued to beat grim projections from earlier in the coronavirus pandemic, with January figures exceeding expectations by 25 percent, according to a report from Maine’s budget office.

Officials are still cautious as projections remain below pre-coronavirus pandemic levels, but the same relatively positive trend has been observed across the country. A recent JP Morgan study found that 21 states including Maine saw positive revenue growth from 2019 to 2020.

State budget revenues were up 6 percent over seven months, Maine Department of Administrative and Financial Services Commissioner Kirsten Figueroa wrote in her Thursday report. It reflects expectations that Maine’s revenue and economic forecasting committees made last year. The state still projects a $650 million shortfall over the next three budget years.

It is still too early to determine how the new figures will affect the Legislature’s consideration of Gov. Janet Mills’ two-year budget, which currently rings in at $8.4 billion, a figure Republicans would like to rein in. Figueroa called the figures “promising” but that she would wait for the forecasting committees to make new judgements in the spring.

Taxable sales continued to be strong in December with an 17.3 percent increase over last year. That excludes restaurant and lodging sales, which both saw around 25 percent decline in revenues year over year, according to the report. Sales and use taxes were up 17 percent during the month and were over budget by 3 percent.

Individual income tax receipts were over budget by $59 million, or 29 percent of what was expected. Enhanced federal unemployment payments and other stimulus programs were a major factor. But Figueroa cautioned that strong stock and real estate markets could encourage quicker investment in capital gains, which could affect revenues in the next two years.

The picture is far rosier than early in the pandemic, when Moody’s Analytics anticipated as much as a $1.4 billion revenue loss over three years. Figueroa pointed to federal aid as the reason why revenues are better than expected, coupled with Maine’s handling of the pandemic.