Personal income up 2.9% from 2001 State’s growth rate for last year lowered

PORTLAND – The state’s personal income rose by 2.9 percent between the first quarter of 2001 and this year, outpacing gains by every other state in New England, according to figures released this week.

That good news was tempered by a downward adjustment in the federal estimate for Maine’s personal income growth throughout all of 2001. Last year’s figure was reduced from 4.8 percent to 4.6 percent by the federal Bureau of Economic Analysis.

Laurie Lachance, the state economist, said the 2001 figures, though slightly below the 5 percent increase expected by state forecasters, are not a great surprise. The lower federal estimates will be used in the next forecast, she said.

State officials cut revenue forecasts earlier this year, largely because of personal income tax receipts that were lower than anticipated.

Gov. Angus King is expected to call a special session of the Legislature this fall to deal with a budget deficit, estimated at $180 million, caused by the revenue shortfall.

Lachance said the state has continued to grow economically while much of the nation has been mired in the recession.

“Maine has fared much better than other places,” she said.

Estimates for the first quarter reveal the state’s personal income growing at a faster rate than the national average. Maine’s performance, which reflected the state’s growth in personal income from the first quarter of 2001 to the same period this year, ranked 18th nationally.

Lachance said the figures are “not cause for major celebration because we’re going through tough times, but if there is good news, it’s that Maine is not suffering as much as other places.”

New England posted the lowest personal income growth of any U.S. region in the first quarter of 2002, with an increase of 0.4 percent compared to a year earlier.

Personal income grew by 2.5 percent in Vermont, 1.5 percent in Rhode Island, 1.2 percent in New Hampshire and zero percent in Massachusetts. Connecticut recorded a 0.3 percent decrease in personal income.

The national average was a 1.7 percent increase.