AUGUSTA – State revenue is $33 million ahead of projections for the state’s fiscal year, but an expert cautioned against too much optimism Tuesday.
Michael Allen, director of economic research for Maine Revenue Services, told the Legislature’s Appropriations Committee that general fund revenue was up again in April, driven by a surge in building supply sales, general merchandise and taxable purchases by businesses.
But he said the warm spring may have prompted consumers to start their buying early, which would mean lower-than-usual numbers for the next couple of months.
Corporate income tax collections were up by $4.6 million in April and tobacco taxes were over projections by $380,325 for the month, he said.
Preliminary numbers for May look strong, as well, he said. The state’s fiscal year ends June 30.
“My best guess for May is over budget $5 million to $10 million for the major tax lines,” he said.
Allen said it’s important to keep an eye on the volatility in the stock market and unemployment. He said a major spike in the price of oil or more debt problems in Europe could set the economy back.
Rep. Sawin Millett, R-Waterford, asked if the oil spill in the Gulf of Mexico will drive up oil prices. Allen said he doesn’t think it will.
“It seems to be more of an environmental concern, not an oil supplies issues,” he said.
Later in the day, Public Safety Commissioner Anne Jordan told the committee that the Maine Drug Enforcement Agency learned last month that it will receive $1.1 million in federal forfeiture money that dates back to a drug bust in Aroostook County in 2004. The state applied for the money in 2007.
Federal law requires that most of the money be used for law enforcement, although Jordan said there may be $250,000 to $300,000 available for other uses. She will meet next week with the Legislature’s Criminal Justice and Public Safety Committee to discuss how the funds should be used, she said.
MaineToday Media State House Reporter Susan Cover can be contacted at 620-7015 or at: scover@centralmaine.com
Send questions/comments to the editors.
