AUGUSTA, Maine (AP) — With sales and income taxes coming in ahead of projections in May, Maine revenues were $48 million ahead of projections 11 months into the fiscal year, setting the stage for a year-ending surplus in the $50 million range at the end of June, state finance officials said.
Among the major revenue lines that came in over budget in May were sales and use taxes at $5.5 million, and individual income taxes at $12 million over budget. Including all lines, revenues were $15 million over budget in May.
Finance Commissioner Ryan Low said after revenue figures were released Monday that he expects revenues for June to be on target, which would close fiscal 2010 June 30 with state books about $50 million in the black.
“Right now, it looks like June will be on budget, plus or minus a little either way,” Low said.
Maine’s budget has been battered by the reeling national and state economy during the last couple of years, resulting in deep cuts in state programs, especially education and social services. In March, the Legislature passed a budget rewrite covering the period through June 30, 2011 that reflected a $310 million gap between revenues and expenses.
Against that backdrop, the latest figures came as good news to a Republican member of the Appropriations Committee, Rep. Robert Nutting.
“I think we’re very fortunate if it comes in at $50 million,” Nutting, of Oakland, said Tuesday. “It’s definitely good news, not the end of our problems, but better than where we were six months ago.”
State fiscal forecasters say a $1.1 billion structural budget hole looms over the next two-year budget cycle, which begins in July 2011. But the actual shortfall may not be that large, Low said, because it’s based on unrealistically high estimates of state funding levels for certain services, such as public school subsidies.
The future revenue picture is mixed, the revenue report says. Despite indications that the New England region is recovering faster than the rest of the nation from the recession, many businesses remain cautious that the recovery could falter later this year, it says.
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