AUGUSTA – Maine ended the 2008 budget year on June 30 with a surplus of $56 million, mostly as the result of income tax revenues above estimates throughout the fiscal year, Finance Commissioner Rebecca Wyke said Monday.

“Most of that, just over $47 million, were revenues over estimates, and the remainder was from unexpended balances,” Wyke said.

She said tighter spending controls on purchases of goods and services and limits on filling vacant state positions contributed to the overall surplus. But, she said, the principal contributor to the surplus was individual income tax revenues that were $43.4 million above projections.

“Unfortunately, the reasons for that really deal with the 2007 tax year,” she said. “So far in 2008, we are on target but not above estimates like we were for last year.”

Last month individual income tax revenues were below estimates by $879,000. Rep. Jeremy Fischer, D-Presque Isle, House chairman of the Legislature’s Appropriations Committee, said that was not unexpected.

“The committee discussed months ago that income tax revenues were the result of income from last year,” he said. “But it is good news to have a surplus given what is happening in the economy.”

Fischer agreed with Wyke that the new budget year starts with several indicators of trouble ahead. He said that with increasing energy costs taking more and more dollars from Mainers for everything from gasoline to electricity – and higher payments for next winter’s heating costs – revenues again may flounder.

“I really worry about people who have not been able to lock in a price for their oil,” he said. “I don’t know what they are going to do.”

Sen. Karl Turner, R-Cumberland, the ranking GOP member of the panel, said the committee was worried earlier this year when energy prices were increasing “nearly daily” as the committee worked to finish the supplemental budget.

“The budget cuts we made then are part of the reason there is a surplus,” he said. “We also had two income tax surprises in April and May when we got more revenues than were expected, again because of earnings in 2007.”

Turner said he expects the new Legislature will be faced with the need to cut state spending further because of higher costs and less revenue as a result of the energy price increases.

Wyke said energy costs already are affecting state revenues and will have a greater impact as prices continue to increase. She said the sales tax ended the year at nearly $5 million above estimates but was bolstered by federal stimulus payments that kept discretionary income levels high enough to help sales tax revenues.

“Those stimulus payments coming into the state are ending soon,” she noted. “I think we could see some problems with the sales tax line when they are done.”

Wyke said the ripple effects of high energy costs would be felt by Mainers in the products and services they buy. She said anyone buying groceries every week has seen significant increases already.

Gov. John Baldacci said in a statement that budget cuts earlier this year allowed the state to end the year with a modest surplus.

“Unfortunately, high energy prices and a still-struggling national economy could further erode revenues in the next fiscal year,” he said.

Wyke said several revenue lines did not meet budget projections, which were revised down earlier this year as a result of the softening economy. Tobacco taxes were down $4.3 million for the year, taxes of insurance companies were below estimates by $4.5 million and estate taxes were off by $4.7 million.

Wyke said while the state has a surplus, all of the money was allocated by lawmakers in budget changes late in the session. Fischer said the committee unanimously voted to take the first $10 million for the state’s “rainy day fund” as a hedge against future economic problems.

But the big beneficiary of the surplus will be Maine’s hospitals. After the $10 million goes to the reserves, $935,000 is used to balance the current budget year, $350,000 goes to replenish the governor’s contingency fund and $1 million is set aside for the loan reserve fund, hospitals will get $43.7 million toward past-due bills the state owes.

Turner said the state, through the Medicaid program, has not been paying the actual cost of care provided by hospitals for years and it is another financial issue the next Legislature will have to address.