Difference between revisions of "Maine state budget"

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* [[Maine House of Representatives]]
 
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* [[Maine Tax Code People's Veto (2010)]]
 
* [[Maine Tax Code People's Veto (2010)]]
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* [[Maine State Legislature]]
  
 
==External links==
 
==External links==

Revision as of 14:28, 7 May 2014

Maine state budget

Flag of Maine.png
Budget calendar:  Biennial
Fiscal year:  2014
State Credit Rating:  AA (as of May 2012)
Current Governor:  Paul LePage
Financial figures
GF expenses[1]:  $3.042 billion (estimated for FY 2013)
All funds expenses:  $7.798 billion (estimated for FY 2013)
Spending % Change:  Decrease.svg3.80%[2]
% from Federal Funding:  36.50%
State Debt:  $16,717,250,000
Per Capita State Debt:  $12,577
Other state budgets
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Maine, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Maine's total expenditures decreased by approximately $0.294 billion, from $8.092 billion in 2009 to $7.798 billion in 2013. This represents a 3.63 percent decrease.

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[3][4]

  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 legislate typically adopts a budget in June. A simple majority is required to pass a budget. The biennium begins on July 1.

In Maine, the governor may exercise line item veto and item veto of appropriations authority.[4]

The governor is legally required to submit a balanced budget. Likewise, the state legislature is legally required to adopt a balanced budget.[4]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[5]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
  • Federal funds: "Funds received directly from the federal government."
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[5] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[5]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Maine $3,042 $2,564 $2,176 $16 $7,798 $5,870.65
Connecticut $19,030 $2,555 $3,618 $2,935 $28,138 $7,824.63
New Hampshire $1,262 $1,601 $2,080 $81 $5,024 $3,796.11
Rhode Island $3,268 $2,659 $2,122 $84 $8,133 $7,734.58
Vermont $977 $1,662 $2,248 $73 $4,960 $7,915.36
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[6][7]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Maine can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data 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.

Expenditures by function, FY 2012 (as percents)[5]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
Maine 13.1% 3.4% 2.6% 28.8% 1.7% 8.6% 41.8%
Connecticut 13.9% 10.3% 1.4% 21.4% 2.5% 10.0% 40.6%
New Hampshire 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
Rhode Island 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
Vermont 31.1% 1.8% 2.1% 25.3% 2.8% 12.8% 24.2%
Source: National Association of State Budget Officers

Expenditure trends

From 2008 to 2012, elementary and secondary education spending fell by nearly six percent. During the same period, transportation expenditures rose by 1.10 percent. The table below details changes in expenditures from 2008 to 2012.[5][8][9][10][11] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
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%
2008 18.8% 3.7% 2.4% 28.2% 2.1% 7.5% 37.4%
Change in % -5.70% -0.30% 0.20% 0.60% -0.40% 1.10% 4.40%
Source: National Association of State Budget Officers

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[5] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[5]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Maine $1,034 $1,495 $171 $0 $351 $3,051 $2,296.92
Connecticut $3,857 $8,719 $742 $612 $5,437 $19,366 $5,385.31
New Hampshire $0 $0 $552 $3 $1,728 $2,283 $1,725.03
Rhode Island $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
Vermont $231 $661 $95 $0 $302 $1,289 $2,057.04
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[6]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[5][8] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Maine ($ in millions)[5][8]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $1,034 $1,495 $171 $0 $351 $3,051 $2,296.92
2012 $1,030 $1,434 $232 $0 $320 $3,016 $2,270.23
2011 $976 $1,415 $209 $0 $345 $2,945 $2,217.88
2010 $954 $1,298 $175 $0 $329 $2,756 $2,076.29
2009 $975 $1,243 $143 $0 $450 $2,811 $2,132.29
Change in % 6.05% 20.27% 19.58% 0.00% -22.00% 8.54% 8.54%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[6][7]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: HP 1079

Fiscal year 2014

Maine state budget -- 2014-2015
Maine State Legislature
Text:HP 1079
Legislative History
Introduced:May 7, 2013
State House:June 13, 2013
Vote (lower house):102-43-6
State 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.[12][13]

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."[12][13]

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.[12][13]

Fiscal years 2012 and 2013

See also: Maine state budget (2012-2013)

Fiscal year 2011

See also: Maine state budget (2010-2011)

Fiscal year 2010

See also: Maine state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[5][9]

Historical state budget spending in Maine ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $3,087 38.1% $2,309 28.5% $2,649 32.7% $61 0.8% $8,106
2010-2011 $2,859 34.6% $2,293 27.7% $3,000 36.3% $122 1.5% $8,274
2009-2010 $2,866 34.3% $2,253 27% $3,151 37.7% $81 1% $8,351
Averages: $2,937.33 36% $2,285 28% $2,933.33 36% $88 1% $8,243.67
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Maine had a state debt of over $16 billion. Its state debt per capita was $12,577. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[14][15]

Total state debt in Maine[16]
Type Totals U.S. rank
Total state debt $16,717,250,000 42
Per capita debt $12,577 35
State and other fund expenditures $5,396,000,000 39

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."[17]

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 0.6 percent drop. Likewise, unfunded liabilities increased from over $2.6 billion in fiscal year 2007 to more than $2.9 billion in fiscal year 2012.[18]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit ranking indicates lower risk for an investor, which in turn lowers costs for taxpayers.[19]

The table below lists the Standard and Poor's credit ranking for Maine from 2001 to 2012 (grades from surrounding states are provided for additional context).[19]

S&P credit ratings from 2001 to 2012
Maine Connecticut New Hampshire Rhode Island Vermont
2012 AA AA AA AA AA+
2011 AA AA AA AA AA+
2010 AA AA AA AA AA+
2009 AA AA AA AA AA+
2008 AA AA AA AA AA+
2007 AA AA AA AA AA+
2006 AA- AA AA AA AA+
2005 AA- AA AA AA AA+
2004 AA AA AA AA- AA+
2003 AA+ AA AA AA- AA+
2002 AA+ AA AA+ AA- AA+
2001 AA+ AA AA+ AA- AA+

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[20]

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.[20]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Maine 36.50% $2,883,526,000 10
Connecticut 23.61% $5,781,844,000 46
New Hampshire 29.00% $1,693,289,000 34
Rhode Island 33.96% $2,310,656,000 23
Vermont 34.79% $1,904,382,000 18

Stimulus

Maine received $1.3 billion in federal funding between February 2009 and June 2013.[21]

Budget transparency

Transparency evaluation
Maine.gov
Searchability Y
600px-Yes check.png
Grants N
600px-Red x.png
Contracts N
600px-Red x.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets N
600px-Red x.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2013.
See also: Evaluation of Maine state website and Constitutional provisions regarding reading of bills

The table to the right is helpful in evaluating the level of transparency provided by a state spending and transparency database.

Independent transparency sites

The Maine Heritage Policy Center maintains a website, MaineOpenGov, that provides transparency information for citizens.[22]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Maine created a multi-measure transparency profile for Maine, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[23][24]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Maine tied for eighth in the nation with 11 other states, earning six out of eight possible points.[24]

Maine - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle N
600px-Red x.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Non-partisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations Y
600px-Yes check.png
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[24]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

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]

Accounting principles

See also: Maine government accounting principles

Maine’s audit reports are published online by the Department of Audit.[26] The Maine Department of Audit's primary responsibility is to audit the financial statements of the state and the expenditures of federal programs. The Auditor’s statutory authority is established under Title 5, Chapter 11 of Maine’s Revised Statutes.[27]

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. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  4. 4.0 4.1 4.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  5. 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  6. 6.0 6.1 6.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  7. 7.0 7.1 United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  8. 8.0 8.1 8.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  9. 9.0 9.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  10. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  12. 12.0 12.1 12.2 The Bangor Daily News, "Maine Legislature overrides LePage budget veto, avoids state shutdown," June 26, 2013
  13. 13.0 13.1 13.2 126th Maine Legislature, First Regular Session, "HP 1079," accessed April 22, 2014
  14. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  15. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  16. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Pew Center on the States, "Widening Gap Update: Maine," June 18, 2012
  18. Maine Public Employees Retirement System, "Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2012," accessed November 12, 2013
  19. 19.0 19.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  20. 20.0 20.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  21. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  22. 'Maine Open Gov, "Home page," accessed August 19, 2013
  23. Institute of Government and Public Affairs at University of Maine, "Home page," accessed February 21, 2014
  24. 24.0 24.1 24.2 Institute of Government and Public Affairs at University of Maine, "Budget Transparency Profiles - All 50 States," September 2011
  25. 25.0 25.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  26. Maine Department of Audit, "Fraud Reports," accessed August 19, 2013
  27. Maine Department of Audit, "Home page," accessed October 24, 2009