State revenue beats projections by 1.1%

AUGUSTA – Maine state government closed out the first half of its fiscal year with an $11.9 million General Fund bulge, topping projections by 1.1 percent.

Releasing the December revenue report, Commissioner Rebecca Wyke of the Department of Administrative and Financial Services cited a general anticipation that “the regional economy will continue to improve.”

Baldacci administration officials said individual income tax revenue was over budget through December by $11 million, or 2.1 percent, while sales tax revenue for the first six months of fiscal 2004 exceeded estimates by $4.4 million, or 1.1 percent.

Restricting the accumulation of a six-month surplus were below-budget performances on the corporate income tax line – $1.9 million or 3.8 percent under estimate – and on the insurance company tax line – $1.2 million or 8.8 percent under budget through December.

Officials said General Fund revenue for the month of December was over budget by $16.3 million, or 7.4 percent.

“Sales and individual income tax revenues were over budget for the month by $4.6 [million] and $10.7 million, respectively,” the monthly report said.

“Maine Revenue Services estimates that better than expected tax amnesty revenue contributed approximately $4.5 million to the combined surplus on the sales and individual income tax lines,” the report said.

Alluding to recent Federal Reserve findings, the monthly report found reasons for optimism about the Maine economy.

“Retail and tourism activity was strong in the fourth quarter. Ski areas in New England reported that early snowstorms helped their industry get off to a good start, and the weak dollar appears to be generating an increase in tourism by international travelers. Even the manufacturing sector reported an improvement in orders,” the monthly report said.

Another positive sign was perceived in the housing industry, but the latest analysis was not without cautions.

“While the housing market remains strong, prices in the region have moderated from double-digit growth to around 8 percent. The continuation of a strong housing market, both in terms of sales and renovations, has helped to maintain solid building material and home furnishing sales,” the report said.

“While the overall view is that the regional economy will continue to improve, businesses are concerned about potential terrorist attacks and rising interest rates,” the report said.