For Immediate Release: Tuesday, November 20, 2018
Contact: David Heidrich, Director of Communications
Department of Administrative and Financial Services, (207) 624-7800
Maine’s Strong Economy Fuels $26.6 Million Revenue Surplus in October
Through the first four months of the fiscal year, General Fund revenues are over budget by a total of $74.2 million.
Read More: Office of the State Controller Revenue Reports
AUGUSTA – Finance Commissioner Alec Porteous announced today that the State of Maine continued its trend of strong revenue growth in October, collecting tax revenues that were $26.6 million over official estimates. Strong performance in individual income tax, corporate income tax and sales and use tax were the primary drivers of the monthly surplus, which was 8.6 percent and 5.9 percent greater than the forecasted projections for the month and first third of the fiscal year, respectively.
“We must remember that the revenue we receive in taxes is generated by the hard work of Maine’s people,” said Governor Paul R. LePage. “Our strong economic growth and rising wages are generating record revenues for the state. Maine’s hardworking taxpayers should be able to keep more of the money they send to Augusta, and I encourage the incoming Mills Administration to consider building on the success of our administration by returning surplus tax dollars to Maine families. Such a move would allow these Mainers to invest in their homes and families, generating more economic activity. It’s the right thing to do.”
September taxable sales—tax revenue realized in October—increased 6.9 percent over a year ago. Tourism-related sales continue to be strong, with those tied to restaurants and lodging increasing by 8.1 percent and 7.1 percent, respectively. In addition, individual income tax revenues were over budget by $11.9 million, or 9.7 percent, for the month. When compared to the same four month period last year, individual income tax collections increased by $41.5 million, or 8.2 percent.
“Maine’s strong economy continues to produce surplus revenues,” said Commissioner Porteous. “Tax receipts across a number of diverse revenue lines have regularly outperformed official estimates this fiscal year. Sales from restaurants and lodging demonstrate that Maine experienced a strong start to the fall tourism season. The strong growth in building supply sales, other retail sales and automobile sales has continued, demonstrating that Maine families continue to make use of increased disposable income.”
Corporate income tax revenues were $11.4 million, or 123.8 percent, over budget for the month. For the fiscal year, corporate receipts are now $18.1 million over last year. For the first quarter of the fiscal year, total corporate revenues are $41.5 million, or 47.1 percent, over collections when compared to the prior year.
In October, the LePage Administration released a budget framework in which Governor LePage called on his successor to return all surplus tax revenues identified by the December revenue forecast to Mainers in the form of tax relief.
The Department of Administrative and Financial Services provides Governor Paul R. LePage and Members of the Legislative Council, Joint Standing Committee on Appropriations and Financial Affairs and Joint Standing Committee on Taxation with a memorandum detailing the State of Maine’s revenue collections each month. The report provides key policymakers with a transparent overview of the State’s tax collections and ongoing economic outlook. It reports revenue growth in two measures: year-over-year growth and growth compared to the State of Maine’s most recent revenue forecast.
Governor-elect Janet Mills will be sworn into office on Wednesday, January 2, 2019. The Mills Administration’s budget proposal must be submitted to the Maine Legislature by February 8, 2019.
Read More: Office of the State Controller Revenue Reports
About the Revenue Forecast
The State of Maine has a two pronged approach to revenue forecasting that occurs through our independent Consensus Economic Forecasting Commission (CEFC) and the Revenue Forecasting Committee (RFC). The RFC typically meets twice a year and issues a revenue forecast that incorporates the recommendations from the CEFC. The forecast provides state government with an estimate of the tax revenues expected to be available for appropriation.
Membership of the RFC consists of the Associate Commissioner for Tax Policy, the State Budget Officer, the State Economist, an economist on the faculty of the University of Maine System selected by the chancellor, the Director of the Office of Fiscal and Program Review and another member of the Legislature's nonpartisan staff familiar with revenue estimating issues appointed by the Legislative Council.
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