Maine beat its revenue predictions for the first four months of the fiscal year by $146.3 million thanks in part to the federal stimulus package the state received in the spring.

Revenues since July 1 are up 11.8 percent compared to expectations, but remain below what they were during the same four-month period in the previous fiscal year, the the Maine Department of Administrative and Financial Services said in a revenue report it released Thursday.

“This summer in response to economic challenges posed by the ongoing coronavirus pandemic in Maine and across the country, Maine’s Revenue Forecasting Committee significantly lowered our revenue expectations,” Commissioner Kirsten Figueroa said in a statement. “Since then, state revenues have exceeded that revised forecast thanks in large part to Congress’ provision of federal support, including enhanced unemployment benefits and individual stimulus checks to households, as well as a strong virus response and good, bipartisan fiscal management by Governor Mills and the Legislature.”

But Figueroa said the state and country are experiencing a resurgence of the virus that will strain households during the winter months. She called on Congress to approve a second coronavirus relief package. Congress has been deadlocked on pandemic relief for months.

State Sen. Catherine Breen, D-Cumberland, expects to continue serving as co-chair of the Committee on Appropriations and Financial Affairs when the new Legislature convenes next month.

Breen said state revenues have exceeded forecasts largely due to increases in car sales, online purchasing, real estate sales and home improvement projects. She also credits Mills with taking the steps necessary to keep Maine’s economy moving forward during the pandemic. But she is concerned that revenues will crater, especially now that the number of COVID-19 cases is spiking and Mills could be forced to further restrict commerce.

“In many respects the revenues are positive because we were able to keep the virus in check, but that is no longer the case,” Breen said.

Breen also called on Congress to act by approving a relief package.

“I wish I felt more optimistic, but the revenue numbers we’re seeing now and the virus (impact) numbers are not adding up,” she said.

According to the state, October revenues from sales and use and service provider taxes were $29.4 million over budget for the month. Consumer sales increased by 13.9 percent over a year ago in spite of lodging and restaurant sales decreasing by 17.6 and 15.9 percent, respectively, due to the pandemic.

Other sectors of the economy that experienced increases included general merchandise store sales by 4.5 percent, auto and transportation sales by 22.2 percent, and building supply stores by 26.5 percent. Sales in other retail stores – including jewelry, drug, sporting goods, book, toy, pet and craft – were up 46.1 percent for October and 40.5 percent for the four-month period, bolstered by more people avoiding in-store purchases and buying goods online during the pandemic.

The General Highway Fund was also over budget for October by $1.4 million. Demand for gasoline and special fuels has improved since it saw an initial decline at the beginning of the pandemic, the state said. However, excise tax receipts dropped 10.5 percent when compared to the same four-month period in 2019.

Earlier this month, a report from the Consensus Economic Forecasting Commission characterized Maine’s current conditions as “unprecedented, highly uncertain, and changing rapidly.” The commission said the pace of the economic recovery could threaten the tax revenues needed to fund state educational and social service programs.

Members of Maine’s nonpartisan Revenue Forecasting Committee will meet Monday to review the October revenue report and to finalize its five-year revenue forecast.


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