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Maine state budget and finances

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Maine budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AA (as of 2014)
Current governor:
Paul LePage
Financial figures
Total spending (state and federal funds):
$8.0 billion (estimated for 2014)
Per capita spending:
$6,034.18 (estimated for 2014)
Total state tax collections:
$3.9 billion (2013)
Per capita tax collections:
$2,923.49 (2013)
State debt:
$16.7 billion (as of 2014)
Per capita state debt:
$12,577 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in Maine
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total government spending in Maine increased by approximately $363 million, from $7.7 billion in fiscal year 2013 to an estimated $8.0 billion in 2014. This represents a 4.7 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Maine a AA credit rating.[1][2][3]
Approximately 36 percent of Maine's general revenues came from the federal government in 2012. This was the 12th highest percentage in the nation.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

In Maine in fiscal year 2014, total estimated spending equaled $8 billion. Estimated per capita spending was $6,034.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Maine $5,330 $2,696 $8,026 1,330,089 $6,034.18
Connecticut $20,938 $5,501 $26,439 3,596,677 $7,350.95
New Hampshire $3,375 $1,703 $5,078 1,326,813 $3,827.22
Rhode Island $5,259 $2,543 $7,802 1,055,173 $7,394.05
Vermont $3,382 $1,771 $5,153 626,562 $8,224.25
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in Maine can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.[3]

In Maine in fiscal year 2013, Medicaid accounted for 32.7 percent of total state spending, a greater share than in any neighboring state.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Maine 16.9% 3.6% 2.3% 32.7% 1.8% 8.2% 34.6%
Connecticut 14.1% 10.6% 1.4% 21.8% 2.3% 9.7% 40.2%
New Hampshire 23.4% 2.2% 1.7% 25.6% 2% 10% 35%
Rhode Island 14.9% 13% 1.4% 24.8% 2.6% 6.3% 37%
Vermont 32% 1.8% 2.3% 28.3% 2.9% 10.9% 21.7%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 and 2012, the share of the Maine state budget spent on Medicaid increased from 29.9 percent to 32.7 percent. See the table below for further details (figures are rendered as percents, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percents)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 16.9% 3.6% 2.3% 32.7% 1.8% 8.2% 34.6%
2012 13.1% 3.4% 2.6% 28.8% 1.7% 8.6% 41.8%
2011 13.7% 3.3% 2.6% 28.3% 1.8% 8.5% 41.8%
2010 17.6% 3.3% 2.6% 28.6% 2.0% 7.8% 38.1%
2009 17.6% 3.5% 2.6% 29.9% 2.0% 7.8% 36.7%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

Total tax collections in Maine in 2013 amounted to $3.9 billion. Per capita tax collections totaled $2,923.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Maine $38,636 $1,779,873 $260,918 $1,531,504 $171,987 $101,532 $3,884,450 1,328,702 $2,923.49
Connecticut N/A $6,746,968 $453,112 $7,811,949 $572,628 $551,859 $16,136,516 3,599,341 $4,483.19
New Hampshire $400,369 $945,290 $272,852 $99,027 $553,197 $99,368 $2,370,103 1,322,616 $1,791.98
Rhode Island $2,331 $1,516,423 $138,518 $1,088,992 $144,310 $49,859 $2,940,433 1,053,354 $2,791.50
Vermont $971,718 $983,226 $106,509 $663,027 $105,635 $48,815 $2,878,930 626,855 $4,592.66
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Maine tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. In Maine, sales taxes and gross receipts accounted for approximately 45.8 percent of total tax collections.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Maine 0.99% 45.82% 6.72% 39.43% 4.43% 2.61%
Connecticut N/A 41.81% 2.81% 48.41% 3.55% 3.42%
New Hampshire 16.89% 39.88% 11.51% 4.18% 23.34% 4.19%
Rhode Island 0.08% 51.57% 4.71% 37.04% 4.91% 1.70%
Vermont 33.75% 34.15% 3.70% 23.03% 3.67% 1.70%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic Maine budget and finance information

Fiscal years 2014 and 2015

DocumentIcon.jpg See budget bill: HP 1079

Maine state budget -- 2014 and 2015
Maine State Legislature
Text:HP 1079
Legislative history
Introduced:May 7, 2013
House:June 13, 2013
Vote (lower house):102-43-6
Senate:June 13, 2013
Vote (upper house):25-10
Governor:Paul LePage
Vetoed:June 24, 2013 (overridden on June 26, 2013)

The Maine State Legislature adopted a budget on June 13, 2013. Governor Paul LePage, however, vetoed the bill on June 24, 2013, arguing that temporary tax increases included in the budget were unacceptable. With the new fiscal biennium set to begin July 1, 2013, LePage's veto set the stage for a possible government shutdown.[10][11]

On June 26, 2013, the state legislature voted to override the veto. In advance of the vote, Democratic State Senator and Chair of the Appropriations Committee Dawn Hill said, "Today, you can no longer vote whether or not you agree with the budget or whether you like the budget. Today, your vote will be either to shut down or not to shut down, and I hope you will think seriously about that." In response to the successful override vote, LePage said, "I don't know how you recover from a tax increase when you're one of the worst states to do business in. I've done a lot of turn-arounds, but this is an obstacle. That's like having a massive hole in the bottom of your ship when you're trying to get across the river."[10][11]

The two-year budget plan raised sales tax from five to 5.5 percent and meals and lodging taxes from seven to eight percent until July 1, 2015. The enacted budget also included a $30 million increase in public school spending.[10][11]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Maine had a state debt of approximately $16.7 billion. Its state debt per capita was $12,577. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[12]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Maine $16,717,250,000 $12,577 35
Connecticut $112,372,072,000 $31,298 3
New Hampshire $18,425,567,000 $13,951 27
Rhode Island $18,863,153,000 $17,960 16
Vermont $7,866,666,000 $12,566 36
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Maine public pensions and Maine public employee salaries

A 2012 report from the Pew Center on the States noted that Maine's pension system was funded at 70 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[13]

The funding ratio for the state's pension system decreased from 79.7 percent in fiscal year 2007 to 79.1 percent in fiscal year 2012, a decrease of 0.6 percentage point, or 0.75 percent. Likewise, unfunded liabilities increased from over $2.6 billion in fiscal year 2007 to more than $2.9 billion in fiscal year 2012.[14]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[15][16]

The table below lists the Standard and Poor's credit ratings for Maine and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[17]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Maine AA AA AA AA AA AA AA AA AA- AA- AA
Connecticut AA AA AA AA AA AA AA AA AA AA AA
New Hampshire AA AA AA AA AA AA AA AA AA AA AA
Rhode Island AA AA AA AA AA AA AA AA AA AA AA-
Vermont AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[18]

The table below notes what share of Maine’s general revenues came from the federal government in 2012. That year, Maine received approximately $2.9 billion in federal aid, 36.2 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[18]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Maine $2,883,526 36.15% 12
Connecticut $5,781,844 23.59% 47
New Hampshire $1,693,289 29.02% 34
Rhode Island $2,310,656 33.76% 23
Vermont $1,904,382 34.79% 18
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

Maine received $1.3 billion in federal funding between February 2009 and June 2013.[19]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[20][21]

  1. Budget instruction guidelines are sent to state agencies in July of the year preceding the start of the new biennium.
  2. State agencies submit their budget requests in September.
  3. Agency hearings are held from October through December.
  4. Public hearings are held from January through May.
  5. The governor submits his or her proposed budget to the state legislature in January (this deadline is extended to February for a newly elected governor).
  6. The legislature typically adopts a budget in June. A simple majority is required to pass a budget. The biennium begins on July 1.

Maine is one of 44 states in which the governor has line item veto authority.[21]

The governor is legally required to submit a balanced budget. Likewise, the state legislature is legally required to adopt a balanced budget.[21]

Agencies, offices and committees

The following standing committees in the Maine State Legislature deal with budget and finance matters:[22]

  1. Appropriations and Financial Affairs Committee, Maine State Legislature
  2. Taxation Committee, Maine State Legislature

Maine's audit reports are published online by the Maine Department of Audit.[23] The department's primary responsibility is to audit the financial statements of the state and the expenditures of federal programs. The state auditor's statutory authority is established under Title 5, Chapter 11 of Maine’s Revised Statutes.[24]

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[25] According to the report, Maine received a grade of C+ and a numerical score of 76, indicating that Maine was "middling" in terms of transparency regarding state spending.[25]

Budget and finance ballot measures

See also: Spending and finance on the ballot and List of Maine ballot measures

Ballotpedia has tracked 44 ballot measures relating to state and local budget and financial matters in Maine.

  1. Maine Airport Moneys Reallocation, Referendum Question No. 3 (1972)
  2. Maine Comprehensive Transportation Policy and Turnpike Authority, Question 1 (1991)
  3. Maine Debt Limit and Short-Term Loans Repaid by Federal Transportation Fund, Question 3 (2002)
  4. Maine Department of Inland Fisheries and Wildlife Revenues, Question 8 (1992)
  5. Maine Extend Veterans Loan Guarantee Program to Businesses, Constitutional Amendment 7 (1984)
  6. Maine General Highway Fund Use, Question No. 5 (1936)
  7. Maine Government Aid for Highway Bridges, Question Two (1916)
  8. Maine Gubernatorial Line-Item Budgetary Veto Power, Question 7 (1995)
  9. Maine Higher Education Loans to Parents, Proposed Constitutional Amendment No. 2 (1982)
  10. Maine Highway Fund Use (1944)
  11. Maine Mining Excise Tax Trust Fund Expenditure, Constitutional Amendment 7 (1983)
  12. Maine Municipal Debt Limit Increase, Proposed Constitutional Amendment No. 1 (1954)
  13. Maine Municipal Debt Limit Increase, Proposed Constitutional Amendment No. 3 (1951)
  14. Maine Municipal Indebtedness, Question No. 3 (1911)
  15. Maine Public Fund Uses (1926)
  16. Maine Public Money Appropriations and Accounting, Proposed Constitutional Amendment No. 4 (1964)
  17. Maine Regulation of Municipal Borrowing, Proposed Constitutional Amendment No. 1 (1973)
  18. Maine Required State Funding for Municipal Mandates, Question 9 (1992)
  19. Maine Retirement System Funding Security and Liability Removal, Question 6 (1995)
  20. Maine School Building Authority and Municipal Debt Limits, Proposed Constitutional Amendment No. 3 (1955)
  21. Maine School Building Authority and Municipal Debt Limits, Proposed Constitutional Amendment No. 5 (1951)
  22. Maine School Finance and Tax Reform Carry-over, Question 1 (2004)
  23. Maine State's Borrowing Power, Proposed Constitutional Amendment No. 8 (1951)
  24. Maine State Debt Limit Increase, Amendment No. 2 (1934)
  25. Maine State Debt Limit Increase, Amendment No. 4 (1919)
  26. Maine State Guaranteed Industrial Loans for Fisheries and Agriculture, Proposed Constitutional Amendment No. 6 (1967)
  27. Maine State Guaranteed Loans for Industrial Purposes, Proposed Constitutional Amendment No. 1 (1957)
  28. Maine State Guaranteed Loans for Industrial Purposes Increase, Proposed Constitutional Amendment No. 9 (1964)
  29. Maine State Guaranteed Loans for Industry, Fisheries and Agriculture Increase, Proposed Constitutional Amendment (1968)
  30. Maine State Guaranteed Loans for Native American Housing, Proposed Constitutional Amendment No. 1 (1972)
  31. Maine State Guaranteed Loans for Recreational Purposes, Proposed Constitutional Amendment No. 3 (1965)
  32. Maine State Guaranteed Loans for Recreational Purposes Increase, Proposed Constitutional Amendment No. 3 (1967)
  33. Maine State Guaranteed Loans for Veteran Housing, Proposed Constitutional Amendment No. 2 (1972)
  34. Maine State Guaranteed Loans on Personal Property for Industrial Purposes, Proposed Constitutional Amendment No. 2 (1965)
  35. Maine State Insured Mortgage Loans, Question No. 9 (1990)
  36. Maine State Insured Mortgage Loans for Affordable Housing, Question 12 (1989)
  37. Maine State Retirement System Funds, Question 9 (1991)
  38. Maine State Retirement System Funds in Trust, Proposed Constitutional Amendment No. 1 (1961)
  39. Maine State Retirement System Funds in Trust, Proposed Constitutional Amendment No. 1 (1962)
  40. Maine State and Municipal Indebtedness, Amendment No. 2 (1933)
  41. Maine Suspension of Legislation Without Adequate Revenue, Proposed Constitutional Amendment No. 4 (1951)
  42. Maine Tax Relief Initiative, Question 4 (2009)
  43. Maine Taxpayer Bill of Rights, Question 1 (2006)
  44. Maine Temporary State Loans, Proposed Constitutional Amendment No. 5 (1967)

Recent news

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Contact information

Maine Department of Administrative and Financial Services
58 State House Station
Augusta, Maine 04333
Telephone: 207-624-7810

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 10.2 The Bangor Daily News, "Maine Legislature overrides LePage budget veto, avoids state shutdown," June 26, 2013
  11. 11.0 11.1 11.2 126th Maine Legislature, First Regular Session, "HP 1079," accessed April 22, 2014
  12. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  13. Pew Center on the States, "Widening Gap Update: Maine," June 18, 2012
  14. Maine Public Employees Retirement System, "Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2012," accessed November 12, 2013
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  16. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  17. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  18. 18.0 18.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  19. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  20. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  21. 21.0 21.1 21.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  22. Maine Legislature, "Joint Standing Committees of the 127th Legislature," accessed March 19, 2015
  23. Maine Department of Audit, "Single Audit Reports," accessed August 19, 2013
  24. Maine Department of Audit, "Home page," accessed October 24, 2009
  25. 25.0 25.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014