Genreal Fund revenue up 55 percent in August

August revenue tops estimate

AUGUSTA – The state General Fund, buoyed by strong individual income tax bookings, was nearly 55 percent above projections in August, but analysts cautioned that the figures reflected favorable timing.

Still, the $25.6 million unanticipated amount in August put year-to-date revenue at $316.6 million for the first two months of fiscal 2005 – $22.2 million, or 7.5 percent, ahead of estimates.

For July and August, individual income tax revenue came in over budget by nearly $15 million, or 13.5 percent. Sales tax revenue recorded in the first two months of the fiscal year was above projection by $4.6 million, or 5.3 percent.

State Controller Edward Karass, in his monthly report, said state tax officials now believe projected growth in the sales tax line has been set too low for the current fiscal year, “and will need to be adjusted.”

Budgeted General Fund revenue for fiscal 2005 exceeds $2.6 billion.

The Baldacci administration closed out fiscal 2004, which ended on June 30, with an overall state surplus in excess of $70 million. Surplus revenue totaled $63 million. The rest was realized through lapsed balances and other adjustments.

The bulk of the unappropriated amount of $70.2 million was targeted for a variety of accounts and programs specified in legislation, but $8.4 million remained set aside.

The governor and lawmakers have been working to offset a structural gap of about $1 billion in the current two-year budget cycle.

State government, meanwhile, has been looking at an estimated gap between spending demands and anticipated revenue of about $785 million in the next budget cycle, plus the cost of implementing a major school funding increase approved by statewide voters in June, according to Baldacci administration budget chief Rebecca Wyke.

Wyke is expected to brief the Legislature’s Appropriations Committee at the panel’s regularly scheduled meeting next week.

The committee last met Aug. 17, when majority Democrats won only one Republican vote in support of a $40 million state borrowing package.

The lack of substantial GOP backing for Gov. John Baldacci’s proposal effectively ended legislative debate over new bonding this year.

The partisan dispute, however, continues on the campaign trail leading up to the November elections as Democrats and Republicans, as well as Green Independent Party and independent candidates, seek seats in the new Legislature to be sworn in this December.

Democrats now hold an 18-17 edge over Republicans in the Maine Senate.

Democrats hold 80 House seats to 65 for the Republicans, according to the House clerk’s office. There is one Green member and two unenrolled members. Three House seats are vacant.