Maine ends fiscal year with $152M budget surplus, credit upgrade

FILE PHOTO / COURTESY PIXABAY Maine ended FY2025 with $152.2 million in surplus revenues, reflecting an upward trend from a two-year slump.

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By Laurie Schreiber

Maine is emerging from a budget surplus slump, although still falling well short of its peak in fiscal year 2022.

The state ended FY 2025 with a $152.2 million general fund surplus, the Department of Administrative and Financial Services reported.

At the end of FY 2022, the surplus peaked at $595.1 million, following several years of growth.

For FY 2023, the surplus was $141 million.

Maine ended its 2024 fiscal year with $93.5 million in surplus funds.

The state ended FY 2025 with a record $1.03 billion “rainy day” fund and an upgraded credit rating from Fitch Ratings, an international credit rating agency that upgraded its bond credit for Maine from AA to AA+, the second highest rating that Fitch issues.

Credit

The state’s fiscal policies “have allowed us to build significant cash reserves, creating flexibility and security for the state,” said Joe Perry, Maine’s state treasurer. "This ratings upgrade from Fitch affirms that we are on a good path."

Ratings agency Moody's also recently reaffirmed Maine's credit rating of Aa1, its second highest rating. Ratings agency S&P reaffirmed its AA rating for Maine.

Fitch said it upgraded Maine's credit rating because the state “maintained much stronger dedicated operating reserves through a challenging budget cycle” and “strong budgetary controls and discipline, along with a low long-term liability burden that has shrunk over time."

Rainy day

Maine's Budget Stabilization Fund, known as the "rainy day fund, reached a record $1.03 billion, the maximum prescribed in statute, representing 18% of general fund revenues from the prior year.

Surplus

The general fund surplus comes when year-end revenues exceed projections and result in unappropriated funds, which are transferred to certain accounts, including the Budget Stabilization Fund, in order of priority through a process known as the "cascade" as determined by the Legislature.

"The state of Maine once again has ended the fiscal year in the black and, consistent with state law, has transferred unappropriated funds to the accounts as directed by the Legislature," said Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services.

After priority transfers are met, Maine law requires dividing the remaining surplus into an 80%/20% split between the Budget Stabilization Fund and the Highway and Bridge Capital Fund. This year's cascade allocated $79.4 million to the Budget Stabilization Fund and $33.8 million to the Highway Fund.

"The nearly $34 million will be used to ensure this year's construction as defined in our three-year work plan is adequately funded," said Bruce Van Note, outgoing commissioner of the Maine Department of Transportation. "The plan includes projects that will improve roads and bridges, enhance safety, and increase economic opportunity through upgraded transportation infrastructure across the state."

For this fiscal year, the Legislature also identified two additional priorities to receive one-time fiscal support through the cascade: the MaineCare Stabilization Fund and the Maine Center for Disease Control and Prevention Fund.

“Over the past six years, my administration has worked hard to invest in Maine people, improve our economy and produce responsible, balanced state budgets,” said Gov. Janet Mills.