AUGUSTA, Maine — Revenues to support state government will dip below previous projections this year but will pick up again in the next two years, a panel of experts decided Monday at the State House.
The state’s Revenue Forecasting Committee makes recommendations in November and May of every year, which among other things help lawmakers grappling with a $6.8 billion state budget bill decide how lean or flush to make the budget.
The committee estimates that overall, General Fund revenues will dip about $17 million from previous projections in the current fiscal year, which ends June 30. However, the latest forecast still reflects a jump of about $6 million in each of the next two years.
With state revenues running flush by tens of millions of dollars, that means if cuts are made in the state budget, it won’t be because they were forced by dipping revenues.
Mike Allen, deputy finance commissioner, called that a “pretty minor adjustment” from the previous forecasts made in November 2016 but cautioned there is some uncertainty in the projections.
The uncertainty hovers mostly around income tax payments for the current year that are made in advance of next year’s filing deadline. Maine’s were relatively flat, but other states in New England such as Connecticut and possibly Massachusetts — more information will be available from other states by the end of the week — have seen significant drops.
The drops could be indicative of either a looming overall decrease in tax revenues or some taxpayers shifting purchases and the payment of taxes because of Maine’s new 3 percent surtax on income above $200,000 or anticipated federal income tax cuts proposed by President Donald Trump.
“There seems to be some evidence out there that maybe people did shift income potentially out of 2016 and into 2017 thinking there’s going to be this big federal tax cut,” Allen said. “Maybe that’s why some states did not have a great April [in terms of tax revenues].”
While the committee’s official projections have been transmitted to the Legislature — May 1 is the deadline for that — Allen suggested the committee reconvene later this week after more data are available that indicate a downward projection is necessary.