AUGUSTA — Following a Tuesday meeting, Maine’s nonpartisan Revenue Forecasting Committee is expected to upgrade the State’s General Fund revenue forecast by an estimated $461.9 million for the current Fiscal Year (FY), which ends June 30, 2021, and by an estimated $460.5 million for FY 2022-2023, according to a news release.
These projected increases surpass the amount of revenue that had been forecasted for the General Fund prior to the onset of the pandemic by approximately $83 million for FY 2021 and by approximately $58 million for FY 2022-2023, the release noted.
“That State revenues have not only returned to pre-pandemic levels but have surpassed those estimates is a testament to the power of the Federal stimulus, our prudent fiscal management of the State budget, the resiliency of Maine businesses and workers, and our focus on keeping Maine people and our economy healthy,” said Governor Janet Mills. “As a result, we have managed to hold the State budget steady while ensuring a robust public health response, protecting essential health care and life-saving services, supporting public education, and providing relief for Maine families and businesses most in need during these difficult times. This work can and must continue as we get shots into arms and get our economy back on track.”
“We have kept our ship steady amid the uncertain waters of the pandemic thanks to sound fiscal management, more than $8.3 billion in Federal COVID-19 relief delivered to Maine, and curtailment measures designed to protect – rather than cut – the programs so necessary during these unprecedented times,” said Kirsten Figueroa, Commissioner for the Department of Administrative & Financial Services. “Throughout this public health emergency, this Administration has protected Maine’s safety net infrastructure, preserved critical programs, and avoided layoffs of State personnel. Our commitment to the fiscal stability of Maine and the lives and livelihoods of Maine people continues, and will be a cornerstone of a forthcoming supplemental budget proposal.”
In managing the State’s finances during the pandemic, Governor Mills worked with the Legislature in a bipartisan manner to pass legislation that set aside more than $106 million in the General Fund and directed department heads to tighten their belts, to freeze non-emergency hiring, to initiate and maintain curtailments, and to maximize federal funds, but to protect services that support Maine people through these difficult times. As a result, the Administration was able to weather the immediate financial storm without cutting critical services.
The Governor also preserved Maine’s Budget Stabilization Fund, also known as the “Rainy Day Fund”, which has a balance of $267.9 million, an increase of more than $50 million under Governor Mills’ tenure, the release noted.
Tuesday’s meeting of the RFC will result in a statutorily-required forecast, due no later than May 1, and follows a December forecast that had incrementally increased State revenues following two pandemic-induced downgraded forecasts.
Relative to its most recent predictions, the RFC’s forthcoming forecast is expected to adjust revenue expectations for the General Fund upward by an estimated total of $1.35 billion from now through FY 2025. The RFC is responsible for projecting revenues that the Administration and Legislature then use to determine the State’s budget.
Last month, Governor Mills signed into law an $8.34 billion biennial budget for FY 2022-2023 that guarantees continuity of current services and provides certainty and stability for Maine people, businesses, schools, and municipalities during the ongoing pandemic. Accounting for today’s projections, the State of Maine is now expected to receive $8.64 billion in General Fund revenues for FY 2022-2023.
“With these new projections, my Administration will craft a supplemental budget proposal in the coming weeks for the Legislature’s consideration,” Governor Mills continued. “We will continue to invest in the health and wellbeing of Maine people, in our kids and our public education system, and in our economic recovery – all of which will help us turn the corner on this pandemic and build a stronger state for future generations.”
In addition to a supplemental budget proposal, the Mills Administration will submit a bond package to the Legislature in the coming weeks, which Governor Mills previewed during her “State of the Budget” address in February. With the passage of the American Rescue Plan Act in March, the Mills Administration is considering whether parts of the bond proposal can be replaced by Federal funds.
Further, the Mills Administration is preparing for the Legislature’s consideration a separate proposal that would dedicate unearmarked, one-time federal funding from the American Rescue Plan Act for targeted workforce, economic, and infrastructure investments to accelerate Maine’s economic recovery.