AUGUSTA – State finance officials said Tuesday that revenue from estate filings has contributed to a $10.6 million surplus in Maine’s General Fund through the first two months of the new fiscal year, but warn that fuel price surges are likely to sap economic strength in key areas.
A monthly report to the governor and Legislature from Baldacci administration budget chief Rebecca Wyke warns of economic pressures from high energy prices linked to Hurricane Katrina over the next six months.
“Home heating oil prices are expected to increase by 40 percent to 50 percent, and gasoline prices, while falling since the initial impact of Katrina, are forecasted to be in the $2.50 to $3 per gallon range for the remainder of the calendar year,” the report said.
“The disposable income households have available after covering energy costs will affect the fall tourism season and holiday shopping period,” the report said.
Wyke said adjustments are probable when state economic forecasters meet in the coming weeks.
Nationally, the report said, economic growth projections are being scaled back.
“Consumers’ spending growth is now forecasted to be close to zero during the final months of 2005, as higher energy prices and an offset for higher auto sales during the incentive-induced third quarter intersect,” the report said.
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