Extra $14.3 million found by Maine Revenue Services

Posted April 03, 2012, at 7:55 p.m.
Last modified April 04, 2012, at 10:20 a.m.

AUGUSTA, Maine — State finance officials have found an extra $14.3 million in state revenue, not under the couch cushions but as a result of a recent accounting delay by Maine Revenue Services.

That revelation could throw a wrench into budget negotiations as the Legislature’s second session winds down.

Rep. Patrick Flood, R-Winthrop, House chairman of the Appropriations Committee, said Tuesday that the committee’s budget work may be delayed, perhaps until May 1.

“The rest of our work is sort of pending information,” he said.

The good-news-bad-news error was discovered during a review of end-of-quarter account balances in March, according to Finance Commissioner Sawin Millett, who briefed lawmakers on the Appropriations Committee on Tuesday and said he “takes full responsibility.”

The $14.3 million represents a portion of a single day’s receipts that were received in January but not processed, he said. The revenue was broken down as follows: $6.6 million in sales tax, $5.2 million in corporate income tax, $1.9 million in income tax withholding and $600,000 in other tax revenue.

Without naming employees, Millett said an employee who was responsible for reconciling the revenue became ill late last fall. Responsibility for completing that task transferred to a manager who took over those duties in addition to his own, Millett said. A replacement has been hired.

“Be that as it may, what happened was a slip of one part of one day that didn’t get reconciled,” he said, stressing that it was not a systems error but a human error.

Millett told lawmakers that his department has taken steps to ensure that similar accounting errors don’t happen in the future. He said a senior manager at Maine Revenue Services will conduct in-depth monthly reviews of revenue accounts.

Flood said the human error was “unfortunate, but also understandable.”

Rep. Peggy Rotundo of Lewiston, the lead Democrat on Appropriations, said taxpayers were owed an explanation and she was satisfied with how Millett described the problem.

Additionally, Millett said, the state budget officer is expected to convene a special meeting of the Revenue Forecasting Committee after this month’s tax filing deadline to see if any adjustments need to be made.

That process is likely what will hold up the Appropriations Committee. If the committee doesn’t have a strong sense of the size of the budget shortfall if will be difficult to pass a budget.

The Appropriations Committee has been meeting for the last several days to sort out pieces of Gov. Paul LePage’s $37 million supplemental budget proposal. Many items have been approved but the most controversial pieces are still up for debate.

Also outstanding is a second supplemental budget that needs to address an estimated $85 million to $90 million shortfall in the Department of Health and Human Services budget for the 2013 fiscal year.

Lawmakers also are awaiting additional information from DHHS related to a computer problem that allowed 19,000 MaineCare enrollees to remain on the rolls even after they were ineligible.

That piece could result in Maine being forced to repay the federal government, which covers $2 of every $3 spent on MaineCare.

Follow BDN reporter Eric Russell on Twitter @BDNPolitics.

CORRECTION:

The headline on this article has been updated to clarify the amount of extra money found. The audit found $14.3 million, not $15 million.

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