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The state’s economic forecasting committee again predicted a significant increase in state revenue collections through mid-2025. Last week, the committee said it expected the state to collect nearly $300 million more than it anticipated in its last forecast.
That gives state lawmakers a roughly $900 million budget surplus as they continue debate over a supplemental spending plan for the next two years.
As we’ve written before, a state budget surplus is somewhat illusory when there are so many unmet needs. Thousands of Mainers, many of them children, are on waitlists for behavioral health services. The number of Mainers who are unhoused is increasing as housing costs are out of reach for far too many Mainers. Each year for over a decade, Maine has seen record numbers of people die from overdoses.
These are just some of the unmet needs that are harming the lives — and too often ending the lives — of our fellow Mainers.
Government cannot — and should not — be the answer to every problem, but when so many people are struggling, when so many needs are unmet, it is hard to conclude that the state has excess revenue.
According to the state’s own data, there were more than 1,000 children on waitlists for home and community-based behavioral health services in Maine in January; 269 of them were in Penobscot County. In some counties, the average time on the waitlist for some services is well over a year.
As of the most recent report from the Department of Health and Human Services, 2,267 adults with intellectual and developmental disabilities and brain injury were on waitlists for services in December.
Some of these children and adults end up in emergency rooms and other inadequate placements as they await services, which are funded by a mix of federal and state money.
These waitlists persist despite the governor and lawmakers putting millions of additional dollars into these programs in recent years.
The state Constitution requires a balanced budget, so financial allocations and revenues must be the same. Hence, there were already many proposals to spend the unanticipated revenue before the latest projection of even higher revenues.
To be clear, this surplus comes from a budgetary projection, which could change, so it may be wise not to allocate the expected money to ongoing expenses or programs, or a permanent lowering of the income tax.
However, when revenues exceed projections year after year, a solid argument can be made that these higher tax collections may persist for some time.
In that light, reconsidering revenue collections, mostly state taxes, could be coupled with making additional investments in unmet needs.
In late March, Republicans pushed for a commitment that a supplemental budget would contain $200 million in tax relief. We didn’t support their plan because it was offered near the end of negotiations on a biennial budget, which Democrats rushed to finish by the end of March, and there was not time for a full analysis of the tax cut plan they proposed. However, we said a debate over tax relief is well worth having, when lawmakers can fully debate the pros and cons of differing proposals. That remains true, perhaps even more so, with new predictions of even higher revenue collections.
Some tax relief, that is specifically targeted to Mainers with the lowest incomes, should be part of the ongoing budget discussions.
At the same time, however, lawmakers cannot forget the many Mainers who are waiting for needed services to improve their daily lives.