COVID-19 is decimating Maine state revenues

File photo Revenue through Maine's General Fund is expected to be $418 million short of original estimates because of the pandemic.

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By William Hall

The state of Maine’s revenues have been hit hard by the COVID-19 pandemic, and on Wednesday officials revealed how hard that impact will be over the next several years.

General Fund revenues will decrease by $524 million in the current fiscal year, $434 million in fiscal year 2022, and $449 million in fiscal year 2023 as a result of the COVID-19 pandemic, the state Revenue Forecasting Committee has projected, according to a news release.

Because the state ended the 2020 fiscal year on June 30 with a $106 million surplus, the 2021 reduction will be slightly offset and will net to $418 million.

Maine's General Fund was projected in April to total $4.1 billion for the 2021 fiscal year, and represents nearly half of the state's budget.

The Revenue Forecasting Committee is a nonpartisan panel of state officials and economic experts, which works with an independent commission to estimate the state’s income twice a year as required by law.

In late February, on the eve of the pandemic in Maine, the committee revised its forecast for General Fund revenue upward by $139 million, including a projected additional $40 million in revenue for the current fiscal year.

After the start of the public health crisis, Gov. Janet Mills instructed all departments of state government to make spending and hiring decisions on an emergency basis, and froze access to uncommitted funds. She has not indicated whether the state will issue a supplemental budget for the current fiscal year, according to the release.

“These numbers are more than statistical projections,” she said. “They represent funding for vital services on which Maine people rely, from health care, to schools, to economic development.

“We know that we will face difficult decisions in the future, but these projections make one thing clear: additional aid and flexibility from the federal government for the states is necessary in order to preserve basic services and ensure the strongest possible economic recovery.”

Mill said she supports a request by the bipartisan National Governors Association to seek $500 billion in federal aid to state governments.

The NGA was scheduled to hold its annual summer meeting in Portland next week, but has moved the event to an online format because of the pandemic.