AUGUSTA, Maine — The State’s updated revenue forecasting report that was announced by the Maine Revenue Forecasting Committee (RFC) Wednesday shows Maine’s revenue will decrease by $523.9 million in the current budget cycle, which ends in June 2021, as a result of the coronavirus pandemic.
Sen. Cathy Breen (D-Falmouth), Senate Chair of the Legislature’s Appropriates and Financial Affairs Committee, says the budget committee prepared for the loss by building up reserves, which leaves $258 million in the Rainy Day Fund and more than $100 million in the General Fund.
“By taking aggressive, proactive measures at the outset of this crisis, Maine has been able to slow the spread of the virus, limit the stress on our health care system and gradually begin to open our economy,” Breen said in a statement. “While we aren’t out of the woods yet, both Maine’s COVID-19 response and responsible spending decisions made in the Legislature over the past two years have left our state better equipped to get back on our feet.”
In response to the report, Gov. Janet Mills said the numbers are more than just statistical projections—" They represent funding for vital services on which Maine people rely, from health care, to schools, to economic development.”
In addition to the Fiscal Year 2021 projected losses, the RFC forecasts revenues will decrease by $434 million in Fiscal Year 2022, and $449 million in Fiscal Year 2023.
“We know that we will face difficult decisions in the future, but these projections make one thing clear: additional aid and flexibility from the federal government for the states is necessary in order to preserve basic services and ensure the strongest possible economic recovery,” Mills said.
“This projection clearly demonstrates the urgent need to make smart, targeted investments in Maine’s economy, including making the best use of federal CARES Act dollars, to accelerate our economic recovery and protect Maine’s ability to meet the needs of our people as we prepare for the next state budget,” Rep. Drew Gattine (D-Westbrook), House Chair of the Legislature’s Appropriations and Financial Affairs Committee, said in a statement.
The Governor’s instruction to all departments of state government to apply emergency-basis scrutiny to spending and hiring remains in place, including freezing access to all unencumbered balances for Fiscal Year 2020. The Budget Stabilization Fund stands at $258 million.
The Administration says no decision has been made yet about another supplemental budget at this point. According to a press release, Mills will review revenue reports, examine revenue forecasts, evaluate potential expenditure reduction options, monitor federal efforts to provide additional aid and flexibility to state governments, and will confer with legislative leaders about the next steps.
Gattine said, “Although we have made smart budgeting decisions and built up financial reserves to mitigate the impact on the state’s fiscal health, we must continue our record of supporting workers, investing in schools and health care and protecting small businesses, while stabilizing our economy. To do so will also require further support from the federal government. Maine is at a crossroads and the decisions we make now need to set the course for a prosperous future.”
Mills says she is continuing to urge Congress to provide additional direct support to states as well as flexibility with funding already authorized in order to continue to protect the public health and safety.