March 2, 2022 – Maine’s Nonpartisan Revenue Forecasting Committee just met to project an additional revenue forecast of approximately $411.6 million for the current biennium, which ends June 2023. However, state government leadership acknowledged that Maine’s budget continues to be in the black as a result of substantial Federal dollars.

Alarmingly, the Committee expressed, “significant concern about shifting economic conditions, calling the fiscal environment ‘uncertain’ and ‘variable’ and noting that the accuracy of their forecast becomes less reliable in future years, leading them to urge caution in use of the revenues.”

Kirsten Figueroa, Commissioner of the Maine Department of Administrative and Financial Services noted that just in the last weeks, “the cost of oil has increased from $72 to over $100 per barrel, inflation as measured by the Consumer Price Index has reached its highest point in 40 years, and Russia has invaded Ukraine, with potentially significant implications for both energy prices and financial markets.”

The Revenue Forecasting Committee provides the Governor, the Legislature and the State Budget Officer with analyses and recommendations relating to the projection of revenues for the General and Highway Funds based on economic assumptions. The committee includes the State Budget Officer, the Associate Commissioner for Tax Policy, the State Economist, and the Director of the Office of Fiscal and Program Review.

The Nonpartisan Committee validated what we at Maine People Before Politics are equally concerned about regarding the precarious future of Maine’s financial stability. With Maine’s current Governor even noting that “economists are also warning us that revenues, particularly those in later years, are volatile and should not be counted on.”

The dramatic growth of state government spending over the past 3 years has consequences for Maine taxpayers if all of the new programming is to be maintained in future state budgets. Under Maine’s current path, the rapid expansion of spending based on federal dollars leaves Maine’s taxpayers particularly vulnerable to dramatic state and local tax increases when the federal dollars ultimately evaporate.