Maine’s tax revenues are expected to flatten over the next year and then decline in future years, according to a new projection from the state’s revenue forecasting committee.

The Mills administration said Thursday that the latest forecast is a reminder of the state’s tightening financial environment after years of increasing revenues and state budget surpluses.

The committee announced, following a meeting earlier this week, that it expects state general fund revenues will increase by $24.4 million in the current fiscal year to $5.6 billion, followed by a net decrease of $23.3 million through fiscal years 2026 and 2027.

The projections are consistent with the nonpartisan Revenue Forecasting Committee’s previous forecast from December 2024.

“This report from the Revenue Forecasting Committee reinforces the need for the State to budget responsibly for the coming years, especially given the widespread economic uncertainty of this moment and an unclear outlook on future federal support,” Gov. Janet Mills said in a written statement.

“While we have undertaken necessary steps in Maine to meet our current financial obligations, sensibly planning ahead is now paramount.”

Mills signed into law in March an $11.3 billion baseline two-year budget to ensure the continued operations of state government while the Legislature continues to work on a second part of the budget dedicated to new initiatives and policy proposals.

The baseline budget includes the state’s share of 55% of K-12 education costs, ensures free school meals for all Maine students and maintains municipal revenue sharing at 5%.

It also includes one-time funding to fill a MaineCare gap in the current budget and money to protect Maine forests from the damaging spruce budworm.

Other budget proposals from the governor, including a proposed $1 per pack increase in the cigarette tax, continue to be reviewed.

Looking further out, the latest revenue forecast projects reduced revenues of $2.9 million and $30 million in fiscal years 2028 and 2029 respectively.

The revenue projections are based on an economic forecast from the independent Consensus Economic Forecasting Commission, which recently noted that the state is facing uncertainty around federal policy, tariffs and funding.

The commission has said that if new information becomes available, it may meet again before the next scheduled update on Nov. 1.