Revenues for the next biennium will dive $331.4 million dollars below current levels, members of the Revenue Forecasting Committee predicted Friday.
Heavy hits on individual and corporate income tax revenues – driven by a lagging economy and rising unemployment figures – make up the about $195 million of the expected shortfall, according to figures that will be part of a report to the Legislature due next month.
The next-biggest drop in revenue is predicted in the sales and use tax line, which is expected to decrease by $37.8 million in fiscal year 2010 and $40.4 million in 2011.
Also hard hit will be estate tax revenues, which are projected to drop $17 million in 2010, but rebound to an only $1.5 million dip in 2011.
The committee also revised the revenue picture for the current fiscal year, which ends June 30, 2009. With major hits to sales and income taxes, state government will have to rein in spending by $140.4 million. That’s slightly less than the $150 million figure assumed by Gov. John Baldacci last week when he ordered an emergency curtailment of current spending.
Forecasting committee members were still awaiting a few last numbers Friday that will allow them to finalize their projections. Mike Allen, a researcher for Maine Revenue Services, said the projections assume that the economy will begin to “slowly recover” in the second half of 2009. If it doesn’t, he said, the committee will meet again to re-adjust the numbers.
(Statehouse News Service)
