AUGUSTA – With sales and income taxes coming in ahead of projections in May, state revenue was $48 million ahead of projections 11 months into the fiscal year, setting the stage for a year-ending surplus around $50 million, state finance officials said.

Among the major revenue lines that came in over budget in May were sales and use taxes, at $5.5 million, and individual income taxes, at $12 million. Including all lines, revenue was $15 million over budget in May.

After revenue figures were released Monday, Finance Commissioner Ryan Low said he expects revenue for June to be on target, which would close fiscal 2009-10 June 30 with the state about $50 million in the black.

“It looks like June will be on budget, plus or minus a little either way,” Low said.

Maine’s budget has been battered by the weak national and state economies during the last couple of years, forcing deep cuts in state programs, especially education and social services.

In March, the Legislature passed a budget rewrite covering the period through June 30, 2011, that reflected a $310 million gap between revenue and expenses.

The latest figures came as good news to a Republican member of the Legislature’s Appropriations Committee, Rep. Robert Nutting of Oakland.

“We’re very fortunate if it comes in at $50 million,” he said. “It’s definitely good news, not the end of our problems, but better than where we were six months ago.”

Forecasters say a $1.1 billion budget hole looms over the next two-year budget cycle, which begins in July 2011. But the shortfall may not be that large, Low said, because it’s based on unrealistically high estimates of state funding for certain services, such as public school subsidies.

The future revenue picture is mixed, the revenue report says. Despite indications that New England is recovering from the recession faster than the rest of the nation, many businesses remain cautious that the recovery could falter later this year.

 

Copy the Story Link