AUGUSTA, Maine — Members of the state revenue forecasting committee are slightly scaling back revenue projections over the next two years, creating an additional $14 million hole in the state budget that will have to be filled by a yet-to-be-released supplemental spending plan.
The latest decline in revenue further complicates the establishment of a final dollar amount for the supplemental budget, according to state officials.
“With a problem of that magnitude, you don’t find it all in one place,” said Finance Commissioner Sawin Millet. He said his office is working on a supplemental budget to be introduced next month that will find the funds to offset reduced revenues and address several other smaller budget needs.
“We have a problem with the heating oil budget for this complex of state-owned buildings,” he said. “We know we have flood assistance money that is owed municipalities.”
Millett said there are several other accounts that will need to be addressed, as there always are in the traditional supplemental budget. He said issues in this budget year can be addressed with one-time resources, such as the $5.7 million going into the state general fund from a multistate settlement with several large national banks over improper mortgage deals. But holes in the second year of the budget will require cuts in state spending.
“This won’t be easy but I think we can get it done,” he said.
Millett said a reprojection of revenues was expected after January revenues came in significantly below projections. Revenues were $38.7 million below estimates that had just been made in November.
Jerome Gerard, state tax assessor, is chairman of the forecasting panel, which includes state officials and other economists. He said they slightly adjusted downward the income taxes expected to be collected in the two-year budget cycle. Much of that was offset by projected increases in gambling revenues from casinos and from additional fine collections.
“I think we proceeded with caution, try to be conservative given the geopolitical tensions throughout the world,” he said.
Concerns over the increased price of oil and its potential impact on state revenues were a theme throughout the committee meeting.
Mike Allen, associate commissioner of finance, said when the revenue projections last were done, oil was trading at $89 a barrel, well below the $106 per barrel level oil is trading at this week. He said a major spike in energy costs for Mainers likely would affect several state revenue lines significantly and result in further loss of revenues.
“A year ago gasoline cost about 40 cents a gallon less than it does today,” he said. “There are a lot of people out there talking about it going to $4 a gallon and that will have an impact.”
Millett agreed. He said state revenues can be greatly affected by national and international events, whether natural disasters or man-made.
Lawmakers often look to the sales tax as an indicator of the health of the economy because consumer spending often is a measure of whether consumers have confidence in the economy and their ability to afford a new car or television set. Sales taxes have been slightly below projections, but only by a slim margin of less than 1 percent.
“The holiday season, for most stores, was not spectacular,” Allen said. “The more higher-end stores only had 3 percent growth.”
Rep. Patrick Flood, R-Winthrop, co-chairman of the Appropriations Committee, said he was not surprised at the revenue reprojection.
“It’s not as bad as it could be,” he said, “so we are thankful for that.”
Flood said he is “confident” that Millett will come up with the funds needed through savings and cuts to make sure the budget is brought into balance through the supplemental budget.
Well there you go!
Reneues are down!
For all those whineing about the 1 % paying “”ALL”” the Taxes , it looks like they have just plain run out of Money to siphon out of the remaining 99%!
It looks like maybe they where right!
They are unstustainable!
Yes, Mr. Marden LePage “I’ll bring in the jobs” has failed. The sad part is that this situation is a marker that so many of our desperately poor neighbors can’t buy the necessities of life. I’ve said it before and I’ll say it again. Business and employment are symbiotic. If you start buying your products from overseas and lay off your workers, eventually they will not be able to buy even your cheap imported crap. To survive we must work together. American business must hire American workers. That way the people of America have the resources to buy your products. To do otherwise might save you a buck for a little while however eventually both your customers, and you, go down.
Protectionism has never worked. When costs of production are artificially high businesses can’t compete and many go elsewhere. Forcing people to buy only domestically with imports banned, only increases consumer prices, decreases availability of products, and increases the poverty.
Apparently the GOP concept of an open “free market” isn’t working either. Have you missed the depression, er, recession the world has been in since Bush took office?
We have a long way to go to restore a free market in both Maine and the country. The progressive imposition for decades of more and more controls, harassment, and taxation is taking its toll. Obama has almost completed an entire 4 year term, leaving us worse off than when he started. You can’t keep blaming it all on Bush.
I think you are mistaken. I think our economic problems lay squarely in the unregulated free market system envisioned and pushed by the GOP.
We don’t have a free market system. We have a mixed economy with some elements of freedom and some of statism. The statism has been progressively worsening, more so under Obama than Bush, but Bush didn’t start it either.
The “new protectionism” is Suicide Nets in the Chinesse Sweatshops!
If less money is coming in, then less money should be going out.
CUT SPENDING ! ! !
Yes! Cut spending in YOUR neighborhood! Slash the money people can spend at YOUR workplace!
See how long YOUR job lasts when that happens. It’s the Republican dream for American, the race-to-the-bottom.
You can’t spend more than you have no matter what “neighborhood” you are in. Jobs are a consequence of a productive economy, not government spending. You can’t consume what isn’t produced. The “race to the bottom” is imposed by leftists trying to reduced everyone to a lowest common denominator.
Everything government spends it has to TAKE from someone else. Maybe we should all TAKE 50% of the pay that the drones in government make and put it toward the budget.
Sure , continue job and wage stagnation until there is NOTHING left!
Could it be that the economy in Maine is in dire straits and the spin doctors are telling us little white lies ?
“Slightly” scaling back??? 14 million???
Another 14 million on top of the last 38.9 Million. Yah, don’t worry…no problem…we’re just scaling back a tad on our figures. Man, if there’s one thing that’s clear by now it’s that the LePage administration has a real problem with numbers. There’s no wonder getting a budget has taken so long. This incompetence has and will continue to lead to nothing but chaos in government and government services. Shape up Paulie!
Everyone here realizes your hate and contempt for LePage but no one knows what you would do different than him. Can you tell us how you would balance the budget keeping in mind that you are against any MaineCare cuts or any welfare cuts? For the record, I agree with LePage and what he is doing in trying to get this State back to a sensible affordable budget, not some dream package for extremist left wingers that want everything for nothing.
you are right on!! The state has been run into the ground by the spending and making promises into the future they could not support or sustain. Lepage is totally correct to get things back in balance so we can afford our goverment. With the country being run by those who want more dependence on goverment to keep their jobs, i am afraid there is not that much Lepage can do in the big picture until the folks in Washington get out into the real world.
How would I try to balance the budget? The same way I do every day within my own household, by increasing revenue (Work harder/longer) and by cutting back on unnecessary spending. I’d work harder to create the one thing that eliminates the need for government assistance. JOBS! I’d look at making cuts across the board in every agency that minimizes negative impact on my citizens. On both these fronts Mr. LePage is failing badly. Another issue that no politician wants to look at is the enormous number of representatives we have in this State and the accompanying cost involved in each one’s salary, healthcare, and lifetime pensions. We can’t continue to support as many of them as we’ve always done so in the past. Cut em in half.
What’s Paul’s job strategy? He seems to have a fixed strategy of constantly degrade Maine citizens and the State itself by calling us lazy welfare leeches and Maine itself a “Welfare State” (As Mr. LePage did last week). I’m pretty sure that kind of talk appeals to selfish right wing conservatives everywhere who cheer each such utterance. However, in the long run such cold and narrow minded thinking will do little to attract large or small businesses/industry back into our state. We need a salesmen and salespeople to promote every positive thing our people and our State has to offer. In addition to degrading us and our State he further frightens people away by serving his own personal fixation on the poor by constantly deflecting the economic problem to arguments over providing the poor/needy healthcare. Which again does nothing to sell our State to others and is largely a waste of time that will only serve to keep one person (No, I guess two) employed, that would be Mr. Paul LePage and his daughter Lauren. Frankly I think the needs of Maine and Mainers should be put well before those two.
LePage does not call the “state itself” “lazy welfare leeches”. He is trying to protect the productive people at all income levels from those who are. “Welfare statism” is a political concept imposed by the left for decades and will not removed overnight. It includes the unproductive political class that does more damage than the truly poor ever could.
Sadly you’re clearly wrong here. I know it might be difficult to face but Paul did indeed openly state to the press for all to see, read, and contemplate that Maine is a Welfare State.
Here’s a direct quote from Paul cited in a KJ story last week. “Mainers understand we can no longer afford to be all things to all people,” LePage said. “We have a choice: we can continue to be a WELFARE STATE or we can revive the American Dream.” Now that’s a real piece of salesmenship for selling Maine and Maine people to outsiders looking to invest here, right?
I guess for him and some here the American Dream is all about benefiting only oneself and saying the hell with anyone else even those most in need. Ya know, I’ve never heard of any great society built on that kind of thinking. Have you?
Source reference: http://www.kjonline.com/news/lepage-democrats-resorted-to-obstruction_2012-02-17.html?searchterm=lepage+welfare+state
And he was exactly right in saying what he said, we do have a choice. And we can continue to be a welfare State or we can change that and become a self sufficient State. And I am not offended by the remark nor does it cause worry that this will keep outsiders from investing here. It is no secret in this country that Maine is a welfare State, saying it out loud does nothing to enhance or detract from that fact.
Maine is indeed a welfare state. Maine gets more money from the Feds than we pay in. Like all welfare recipients Maine cannot support herself.
To acknowledge that Maine government is welfare statism does not mean the everyone has a welfare mentality or is on welfare (which is what Quimby said about rural Maine). Welfare statism is not restricted to the most poor living at everyone else’s expense, it is much more pervasive than that. It is the dog-eat-dog pressure group warfare between different groups all trying to use government to benefit themselves at the expense of the rest (the mentality that government is all things to all people). No one wins in such a system except the power-seekers who run it and foster it.
We do have a choice between that and civilized American individualism in which the government protects the freedom and rights of the individual to life, liberty, property, and the pursuit of one’s own happiness and not forced to live for any group. That is what led to a great country and made a great society possible. Maine has become a political and economic third world country and that has to be acknowledged before it can be reformed. In the meantime anyone thinking of living or investing in Maine can quickly find it out for himself. It is to LePage’s credit that he acknowledges what it is and projects a vision for the right direction.
Nice speech. I particularly like the section “….different groups all trying to use government……” Sounds like an anti GOP diatribe and I always agree with that these days. However I disagree with the premise that LePage should take credit for anything positive. Tell me, does “pursuit of one’s own happiness” include gay marriage?
Pursuit of your own happiness is your right to decide and peacefully act on behalf of yourself provided you do not violate the rights of others to do the same. No one has the right to stop you from you doing what you want in your own bedroom based on your own judgment of what you think is best for you, whether you are right or wrong about that. You can give arguments for why you think common concepts (like marriage) should be changed, but you have no right to force that on how others think.
Add for watchdogME below: “Bedroom” emphasizes that it’s hard to imagine anything more intensely personal than sex, emphasizing in turn how appalling government interference is. But in the context of your more general question “bedroom” is of course symbolic; people close and living together (for any reason) is much broader than “bedroom”.
I agree completely with you. I sort of wish you didn’t couch it just in terms of “what you do in your own bedroom….” but still, good for you to stand up for the civil rights of ALL American citizens. Of course I still passionately disagree with your opinion of Lepage. Sorry.
LePage can’t afford the Maine Maritime Academy. The $9 million subsidy to a sports and spa facility of which nearly 1/2 half of the students are from out of state is absurd in this financial envoronment.
Is there anyone in the current administration in Augusta that has the ability to do basic math. It seems no one has the ability to add and subtract.
If less money is coming in, then less money should be going out.
CUT SPENDING ! ! !
So what about the jobs that tax cut for wealthy were supposed to create ?
Where are they ?
Take the log out of eye, and look at the record.
The conservative plan was two pronged.
Neither part has worked.
Might I humbly suggest, given that obvious fact,
that we go back to the tax rates that we had when the Federal Budget was last balanced ?
Are there any more reasonable suggestions than continuing to do what has not worked,
and expecting it suddenly have a different outcome ?
Well ?
The Baldacci administration had the same problems.
It was okay for him, he was a liberal democrat and he tried real hard.
The same bureaucrats at Maine Revenue Service are doing the “projections”. Accurately quantitatively predicting what will happen in the economy is not easy, but it helps to have some concept of what makes prosperity possible, and that it isn’t raising taxes to “reduce costs to government” caused by people who are allowed to keep some of the state’s money under the guise of earning it themselves by their own work.
A budget is a prediction of what may happen. The revenue prediction has been downgraded based on actual income received for the last few months.
So how is that cut taxes and balance the budget too, plan working out ?
If less money is coming in, then less money should be going out.
CUT SPENDING ! ! !
Tell it to GOTea Party in power .
So how has it worked out, so far ?
The Tea Party has a long way to go in throwing the statists out of power.
How is their budget ?
What do you mean by their budget? The “tea party” is a social and political movement consisting of individuals and multiple organizations, each of which does not spend more than it has. There is no “budget” for a movement.
Oh . That is why their politics makes no sense.
Thanks for clearing that up.
The social aspect is… ah, fine for them, I mean you and your sugar daddies, the Koch Bros. ,
I am sure.
A general movement defending American individualism against the progressives makes a lot of sense. Your sneering contempt towards those who choose to support it doesn’t change that.
All those tax breaks are really paying off i see ??
Keeping taxes high or increasing them only drives more business, investment and productive people out of the state, and further hurts people who stay. The tax reductions have been far too small to expect any significant improvement. How much worse it could have been without them can only be guessed at. It will take a lot more than what the governor and legislature have been willing or able to do to achieve a significant improvement in the economy.
Time to give millionaires more tax breaks! The last ones really brought jobs flooding into Maine, and improved the economy so much! [sarcasm alert]
People don’t exist to provide “jobs”. Good jobs are a consequence of a productive economy in which people are free to work on behalf of themselves. No one is swarming into Maine only to be punished for productivity. The left is blocking reform in every way it can.
Gerard tells us that less “income taxes expected to be collected… was offset by projected increases in gambling revenues from casinos and from additional fine collections.” Maine Revenue Service bullies innocent people and forces them to pay taxes they don’t owe plus punitive interest and “penalties’ as MRS invents new interpretations of tax law and imaginative “estimates” of things to tax that never happened, all used to shake down the unwary. This scheme was adopted under Baldacci to take more money while pretending there was no tax increase. They dishonestly pretend that the additional money they take was from more “compliance” and have used that as an excuse to raise the MRS budget. This is state-sponsored organized crime. Gerard was Baldacci’s acting Commissioner of MRS and should have been fired long ago for his abuse of civil rights. The legislature has known for years of this MRS abuse exploiting non-objective law but has refused to stop it because they want the money.
Maine Revenue Service doesn’t bully innocent rich Mainers because LePage is giving them a tax break.
MRS will bully anyone. Lower or higher tax rates have nothing to do with it. MRS is a civil rights nightmare.
Judging by your posts it’s clear you know a lot about bullying.
Principled, knowledgeable defense of the rights of the individual and rejection of the tyranny of collectivism and statism are not “bullying”.
I admire principles, but mouthing off about how MRS is
bullying people is NOT principles.
If you have evidence that
MRS is bullying people than share those facts.
Spreading rumors and making accusations that you have no proof
of is not principles, it’s the LACK of principles.
Your smearing people over issues you nothing about with false accusations of “mouthing off” “rumors” is disgusting. Many cases of MRS abuse have been documented and reported and legislators are well aware of it. MRS is a civil rights nightmare. Learn something about it before you libel other people for protesting it. You are an apologist for the abuse. Liberals used to care about civil rights.
IF YOU HAVE EVIDENCE THAT MRS IS BULLYING PEOPLE THAN SHARE THOSE FACTS?
Here’s how to contact the Maine Attorney General with all your incriminating evidence against Maine Revenue Service. They have some free time, no one has reported any voter fraud lately.
Tell the Attorney General about those strange voices in your head while you are at it.
You can write us a letter at:
Attorney General’s Consumer
Information and Mediation Service
6 State House Station
Augusta, Maine 04333
We will respond as soon as we receive your letter.You can call the Consumer Information and Mediation Service between 9 a.m. – 12 noon, Monday – Friday, at 207-626-8849 or toll-free at 1-800-436-2131. Unfortunately, our phones are often busy. Each year we receive over 8,000 calls or letters. If our phone is busy consider using one of these other options to contact us.You can contact us via e-mail at consumer.mediation@maine.gov. Due to the large number of consumer inquiries, we must limit our e-mail exchanges. Please include your name, address and phone number, and we will contact you.
The complaints have been taken a lot farther than that. The Attorney General’s office defends MRS. MRS has stonewalled complaints and requests to investigate the abuse. Protests against the abuse have been routinely ignored, with little action from the legislature. Sweeping powers granted to MRS give it the authority to impose what it wants without regard to the most basic civil rights that even accused criminals can count on. Stop pretending that the third world government mentality in the state bureaucracy is anything that innocent citizens can rely on for help. When government goes after innocent people there is no place to turn.
Wonderful news!!! The best way to kill a tumor is to cut off its blood supply.
Seems to me Liepage can’t balance a budget.. If he could there would be 14 million surplus not deficit.. Cutting taxes is not a way to drum up revenue, giving these tax breaks to all these big companies is not a way to drum up revenue, In fact it has been proven that all these tax breaks are a waste of time and money.. They were implemented to create jobs which they haven’t.. This is all decreased revenue for the state.. Remember Reaganomics? It did not work for him so why would the same idea work for any of these other republicans? Cutting Mainecare and other public assistance programs for the poor will not be the solution either.. Yes the fat needs to be trimmed but not cutting it all out..
A “budget” means spending within what you have, not “drumming up revenues” by taking more to cover what you spend. The article is about a drop in expected “revenue” that did not appear, not spending more than was planned. Increasing taxes only further destroys the economy.
Let me spell it out for you. He budgeted on the idea that he would of gotten so much in revenue.. He unknowingly budgeted for a 14, million dollar deficit. He cut so much revenue that he didn’t realize he would be 14, million short.. So it is a budget issue.. And raising taxes and not giving tax breaks in an effort to create jobs, are two different things.. The tax breaks are a big waste of money it has been proven not to work.. And cutting taxes does and will decrease the states revenue.. Raising taxes will hurt us, cutting them will help us.. But what would you rather have, the extra money? Or a bankrupt state..
The governor and the legislature relied on MRS projections of future tax receipts just like every other governor and legislature have. Improvements in tax law lowering rates had nothing to do with it. The projections are made on the basis of known tax rates.
Budgeting does not mean raising taxes to pay for spending decided in advance without regard with how much is there to spend. It means spending in accordance with what you have or expect to have to pay for it, not spending first and then “drumming up” the money to cover what you don’t have (as in open-ended property tax assessment increases through “adjusting” the mil rate to cover a priori spending).
The justification for tax reductions is not to “create jobs”. Jobs are a consequence of a productive economy, not state manipulation. Maine’s punitive taxes and controls have been killing the economy by driving productivity and productive people out of the state. The special exemptions in “targeted” tax exemptions such as Pine Tree discrimination may or may not in different applications improve economic statistics, but the discrimination is unfair and it is open for exploitation by further political abuse. It is at best an unprincipled gimmick attempting to patch the fundamental problem of too-high taxes without addressing the cause of the problem. It is a contradictory attempt by the state to have its cake and eat it too.
It has not been “proven” that lowering general tax rates does not ultimately help the economy. On the contrary, when you punish people less they are free to, and have the personal incentive to, produce more. But the moral justification of lower taxes is letting people keep their own assets, not “creating jobs”. “Allowing” people to keep their own money is not a “big waste of money”. The money belongs to individuals, from whom it is taken by the state; it is not the state’s money to “waste”. Money not taken from taxpayers is not “extra” money for them, it is less lost.
Cutting tax rates may or may not increase the total taken in, depending on general tax rates and how they are applied; when tax rates are too high normal people cut back their taxable productivity or leave and there is less to tax. But increasing total tax receipts is not the justification for lower tax rates letting people keep a bigger portion of their own money.
High taxes versus a “bankrupt” state is a false alternative. The state is not bankrupt if it does not spend and owe more than it has. Normal people do not start with spending and then complain they are bankrupt because they didn’t have the money. Don’t obligate yourself to spend more than you have.
The LePage economic miracle marches on.
yessah
The miracle is that Maine has not completely collapsed
Just wait until we hit the democrat goal of $5.00 per gallon gas!
just wait till sales tax revenues tank this summer versus “projections” as tourists opt for ‘stay-cations’ due to gas prices rising to about 6 bucks a gallon…..thank you Obama, thank you spendacrats, thank you ‘moderate’ big government republicans, thank you to the progressives and your centralization policies that are destroying our currency, our ability to save, and our prospects of enjoying a stable economy with a fair system of sound money….keep parroting the ‘anti-tax cut’ mantra you have been brainwashed to repeat ad naseum, it only serves to point out your abject failure in understanding the root of the problems we face and the very painful solutions we ultimately will have to emply to fix the mess the worshippers of government and centralization have created
How is Pres. Obama responsible for the price of gas ?
Don’t you people believe in free market solutions * ?
*It is working just fine to reduce green house gas emissions.
I’m admitting that you conservative had a point on that count.