AUGUSTA, Maine (NEWS CENTER) — With the Legislature's clock ticking in the State House, budget writers on the Appropriations Committee are still seeing different visions for a new state budget. That two-year budget needs to be passed and signed before the end of June.
Committee members on Friday heard more details about the latest forecast of state tax revenues, and leaders of the parties appeared to interpret those numbers very differently.
The state's Revenue Forecasting Committee said that sales tax revenues so far this year were not growing as much as expected, and that April income tax estimates were also growing at a slower rate. As a result, the revenue forecast reduced overall tax revenue estimates by $16.8 million for the current fiscal year that ends in June.
Budget officials said they still expect a surplus, so "don't anticipate problems." And forecasters predicted a slight rebound of more than $11 million for the FY 18/19 budget, due in part to expected new sales tax revenue from online giants Amazon and Airbnb.
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However, there were warnings about the uncertainty of future income tax collections. The chairman of the Revenue Forecasting Committee said there is a lot still unknown about the impact of proposed federal income tax cuts, and Maine's current, controversial 3 percent tax surcharge on higher incomes that was passed by voters as referendum Question 2.
In addition to those uncertainties, Dr. Michael Allen of the Maine Revenue Service said income tax estimates are also reported to have dropped in Massachusetts, Connecticut and Vermont, but he said the reasons are unclear.
Leaders of the Appropriations Committee expressed very different reactions to the forecast.
Republican Sen. Jim Hamper told NEWS CENTER the new forecast changes how they need to handle the new budget, because of real concerns about future income tax declines.
However, Rep. Drew Gattine, the Democratic co-chair of the committee, said the forecast still shows revenue increasing over the next four years, and said his party will continue to push for expanded funding for education, property tax reform and other goals.
The two committee chairs said they hope to vote on a budget package by the end of the month to send to the full Legislature.
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