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February 23, 2009

Augusta prepares for aid package

By The Mainebiz News Staff

The state expects roughly $900 million from the $787 billion federal stimulus package, though members of the Legislature expect more details this week.

Maine Finance Commissioner Ryan Low told lawmakers Friday that Maine will receive about $900 million of stimulus aid, although he stressed that figure is preliminary, according to the Associated Press. A large chunk of the money has already been earmarked by the federal government for tax cuts, added unemployment benefits, education and consumer incentives. Last week, Sen. Olympia Snowe's office estimated the amount Maine could receive was closer to $1.3 billion.

One such incentive is expected to spur new car sales, reported Maine Public Broadcasting Network. Low said sales tax on new vehicles will be exempt on federal taxes, and that taxpayers can deduct interest paid on any loans they get to purchase a new car, light truck, recreational vehicle or motorcycle, according to the news service.

Low and Gov. John Baldacci stressed that the federal aid will not be a panacea for Maine's fiscal woes. The state's proposed $6.1 billion budget faces an $838 million shortfall for the two-year cycle starting July 1, reported the AP.

"It's important to recognize this is not a fix-all for the general fund budget," Low told members of the state Appropriations Committee. "There's a very high level of expectation these funds are going to solve all of our problems."

Mainers can track the status of the stimulus money here.

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