For Immediate Release: Tuesday, December 4, 2018
Contact: David Heidrich, Director of Communications
Department of Administrative and Financial Services, (207) 624-7800

State of Maine Increases General Fund Revenue Forecast by $362.4 Million

Action by Revenue Forecasting Committee follows months of strong revenue collections across a number of diverse tax lines.

AUGUSTA – Yesterday, the Maine Revenue Forecasting Committee (RFC) formally submitted their General Fund revenue forecast to Governor Paul R. LePage and the Maine Legislature. The RFC revised Maine’s tax revenue forecast upward by $362.4 million, an increase of 3.25 percent. The report is one of two statutorily-required forecasts that are completed each year.

The current forecast is divided into three parts: revisions to the current 2019 fiscal year, revisions to the fiscal year 2020-2021 biennium, and projections for the fiscal year 2022-2023 biennium. Changes to the current fiscal year, which concludes on June 30, 2019, include a positive revision of $99.2 million, an increase of 2.7 percent. The forecast for the 2020-2021 biennium, which will serve as the foundation of the Mills Administration’s budget proposal, has been revised upward by $263.2 million, or 3.52 percent.

“Reducing the tax burden on Maine families has proved to be an excellent policy decision. We have cut taxes for more than half a million Mainers. Despite income tax rates being reduced by 20 percent, the State of Maine is realizing record tax revenues,” said Governor Paul R. LePage. “This success is why I have recommended to Governor-elect Mills that her administration return surplus tax dollars to Maine families in the form of new marginal income tax rate reductions.”

The revisions to the forecast come as the State of Maine has recognized revenues above the existing baseline forecast from tax lines including—but not limited to—sales and use tax, individual income tax, and corporate income tax. All three tax lines have contributed to the State of Maine’s robust tax revenue performance reported by the Department throughout the current fiscal year.

“We must always remember that the revenue we receive in taxes is due to the hard work of Maine’s people,” added Governor LePage. “This is why I’m advocating for accelerating the tax cuts contained in the budget my administration provided to the Governor-elect’s transition team on November 16. The tax cuts I recommended would reduce Maine’s income tax burden by another 20 percent. Our strong economic growth and rising wages reflect Maine’s strong economy. It will be incumbent upon the new administration to maintain and support policies that continue to promote robust personal income and earnings growth.”

Governor LePage continued, “During my time as governor, our administration has brought stability to state finances and implemented pro-business, pro-growth policies across state government. The incoming administration is poised to assume a state government that is vastly improved—both structurally and financially—from the one I inherited.”

In addition to increases to the existing baseline forecast, the Committee also established the General Fund forecast for the 2022-2023 biennium at $8.3 billion.

“Maine’s robust economy has produced monthly surplus revenues throughout the year,” said Commissioner Porteous. “The Revenue Forecasting Committee’s report demonstrates that strong revenue collections are expected for the foreseeable future. The pro-growth policies of the LePage Administration have helped fuel these returns. With wages rising faster than any other state in New England, personal income growing at more than 4 percent in three of the past four years, and population increasing since 2015, Maine’s economy is strong and well-positioned to continue growing.”

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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