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Maine lawmakers face big budget choices with new revenue expected

Being “flush with money,” as one legislator termed it, can present its own challenges.

AUGUSTA, Maine — If predictions are correct, Maine will have a lot of cash coming in over the next 18 months.

But being “flush with money,” as one legislator termed it, can present its own challenges.

On Tuesday, members of the Appropriations Committee heard details of the latest state revenue forecast, which is predicting an additional $822 million in tax revenues in FY 2022/2023, which begins in July. 

Dr. Mike Allen, the state's leading tax expert, told committee members the Revenue Forecasting Committee expects the economy to remain solid, despite COVID and inflation. It also anticipates increases in all three primary revenue sources — personal income tax, corporate income tax, and sales tax.

Maine Finance Commissioner Kirsten Figueroa said Gov. Janet Mills will send lawmakers a supplemental budget plan next month with details on how she thinks the added revenue should be used.

“The administration and governor, in particular, have announced she would like to provide some direct relief to citizens as we enter the winter months and are seeing increased heating costs, electricity costs, the cost of fuel, as well as maintaining that heavy skepticism of we are still in the pandemic. Are these revenues ongoing? Let’s continue to be cautious,” Figueroa said.

Lawmakers, however, are likely to face conflicting pressures on how the money should be used.

There were many bills passed by the Legislature last year, but not funding, despite having hundreds of millions in extra revenue then.

Rep. Teresa Pierce, D-Falmouth, co-chair of the Appropriations Committee, said many will see the latest revenue projection as an opportunity to fund some of those programs, as well as to ensure the continuation of programs passed earlier this year. 

At the same time, Republicans are already pushing to have much of the added revenue given back to taxpayers, whether by a tax cut or one-time payments.

All of that will have to be decided by the committee, then approved by the full Legislature.

“I think we absolutely have to be looking at where Mainers are hurting, what their needs are, and what we can do to help with that,” Pierce said. “So I’m open to any of those conversations moving forward.”

Rep. Sawin Millett, R-Waterford, said he believes they need to use the money to offer direct help to Mainers.

“A lot of that $822 million, it seems to us, should be set aside for addressing those problems people are dealing with and getting through a tough period rather than starting new programs,” Millett said. 

The budget writers on the Appropriations Committee will have a lot of work to do and not a lot of time in which to do it.  

Work for the new session starts in early January, but it’s a shorter, three-and-a-half-month session. All the bills, including any budget revisions, have to be completed by mid-April.  

An update to the revenue forecast is expected in March, and major decisions on the use of the projected new revenue may have to wait until then — just weeks before the session is scheduled to end.

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