Maine state budget and finances

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Maine budget and finances

General information

Budget calendar: Biennial

Fiscal year: 2017

State credit rating: AA (as of 2017)

Current governor: Janet T. Mills

Financial figures

Total spending (state and federal funds): $8,055,000,000 (estimated 2016)

Per capita spending: $6,050 (estimated 2016)

Total state tax collections: $4,130,242,000 (2016)

Per capita tax collections: $3,102 (2016)

State debt: $5,011,671,000 (2014)

Per capita state debt: $3,770 (2014)

State budget and finance pages • Total state expenditures • State debt • Tax policy in Maine

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can differ from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis. This article, which is updated on an annual basis, was last updated in June 2017. It contains information from several sources; consequently, the currency of the information can vary from source to source.

In Maine, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS

Between fiscal years 2015 and 2016, total government spending in Maine increased by approximately $329.0 million—from $7.7 billion in fiscal year 2015 to an estimated $8.1 billion in 2016. This represents a 4.3-percent increase.

In Maine in fiscal year 2015, 50.3 percent of total tax revenues came from sales taxes and gross receipts. Income taxes accounted for 40.9 percent of total state tax collections.

Education accounted for 21.4 percent of state expenditures in fiscal year 2015, while 32.8 percent went to Medicaid.

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• 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 are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

Revenues

2016 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.

State tax collections by source ($ in thousands), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes	Total	2016 population	Per capita collections
Maine	$35,425	$2,077,913	$272,253	$1,689,129	$55,522	$4,130,242	1,331,479	$3,102
Massachusetts	$5,818	$8,683,866	$1,122,219	$16,764,223	$706,879	$27,283,005	6,811,779	$4,005
New Hampshire	$406,394	$982,832	$329,549	$788,210	$134,961	$2,641,946	1,334,795	$1,979
Vermont	$1,056,323	$1,031,257	$117,328	$828,322	$52,635	$3,085,865	624,594	$4,941
United States	$18,364,298	$442,909,995	$52,164,396	$392,286,910	$24,538,146	$930,263,745	322,762,018	$2,882.20
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017

The table below lists 2016 tax collections by source as percentages of total collections. About 50.3 percent of Maine's total state tax collections came from sales taxes and gross receipts.

State tax collections by source (as percentages), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes
Maine	0.9%	50.3%	6.6%	40.9%	1.3%
Massachusetts	0.0%	31.8%	4.1%	61.4%	2.6%
New Hampshire	15.4%	37.2%	12.5%	29.8%	5.1%
Vermont	34.2%	33.4%	3.8%	26.8%	1.7%
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2014, federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.2 billion in federal aid in 2014, accounting for about 41 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2014, or just 17 percent of the state's general revenues, the lowest percentage in the nation.

The table below notes what share of Maine’s general revenues came from the federal government in 2014. That year, Maine received approximately $3.0 billion in federal aid, 36.6 percent of the state's general revenues. Taking into consideration the state's 2014 population, this came out to about $2,252 in federal aid per capita. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2014
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenues	Ranking (by % of general revenues)	Est. 2014 population	Aid per capita
Maine	$2,997,132	36.6%	9	1,330,719	$2,252
Massachusetts	$13,658,836	27.8%	37	6,749,911	$2,024
New Hampshire	$1,658,713	28.0%	36	1,328,743	$1,248
Vermont	$1,938,148	33.6%	20	626,984	$3,091
Sources: United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2014.

Spending

Estimated 2016 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2016 (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.

The total estimated government spending in Maine in fiscal year 2016 was $8.1 billion.

Total estimated state spending, FY 2016 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Maine	$5,519	$2,536	$8,055	1,331,479	$6,050
Massachusetts	$50,652	$9,751	$60,403	6,811,779	$8,867
New Hampshire	$3,623	$2,162	$5,785	1,334,795	$4,334
Vermont	$3,546	$2,016	$5,562	624,594	$8,905
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 Bureau estimates. Source: National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017

Spending by function

See also: State spending by function as a percent of total expenditures

State spending in Maine can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2015 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

In fiscal year 2015, other spending accounted for 33 percent of Maine's total expenditures.

State spending by function as a percent of total expenditures, FY 2015
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Trans- portation	Other
Maine	17.6%	3.8%	2.1%	32.8%	2.2%	8.5%	33.0%
Massachusetts	11.6%	10.1%	2.1%	23.8%	2.4%	9.1%	41.0%
New Hampshire	20.7%	2.4%	1.3%	29.7%	2.1%	9.4%	34.4%
Vermont	31.8%	1.7%	2.0%	28.5%	2.9%	10.9%	22.2%
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."

Spending trends

The table below details the spending trends in Maine in previous years. Figures are rendered as percentages, indicating the share of the total budget spent per category.

Spending by function from 2010 to 2015 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2015	17.6%	3.8%	2.1%	32.8%	2.2%	8.5%	33.0%
2014	17.0%	3.5%	2.1%	34.4%	2.0%	7.8%	33.2%
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%
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."

State debt

See also: Maine state debt

State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, Maine had a debt of $5,011,671,000 in fiscal year 2015. The state debt per capita was $3,770. This ranked Maine 40th among the states in debt and 18th in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.

Economic indicators

See also: Economic indicators by state

Maine's GDP increased by 0.2 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

In Maine, most residents earned incomes that were at least 400 percent above the poverty line, although at 37 percent, this was the smallest percentage among neighboring states. Between 2011 and 2013, the median annual household income was lower in Maine than in its neighboring states.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income (2011-2013)	Unemployment rate		Total GSP (2013)†
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Maine	12%	20%	31%	37%	$50,668	6.6%	5.8%	$54,755
Massachusetts	12%	15%	24%	49%	$64,555	7.2%	6%	$446,323
New Hampshire	9%	13%	29%	49%	$69,888	5.2%	4.3%	$67,848
Vermont	9%	19%	31%	40%	$56,175	4.5%	4.4%	$29,509
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † Median annual household income, 2011-2013. ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Budget process

State documents and agenciesBelow are links to official Maine budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office. Maine CAFR Maine budget agency

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

1. Budget instructions are sent to state agencies in July of the year preceding the start of the new biennium.
2. State agencies submit their budget requests by September 1.
3. 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.
4. The legislature adopts a budget by 30 days prior to its adjournment. 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.

The governor is legally required to submit a balanced budget proposal. Likewise, the state legislature is legally required to pass a balanced budget.

Agencies, offices, and committees

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

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. 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.

Public Interest Research Group 2016 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 2016. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. 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.

Noteworthy events

• A partial government shutdown ended in Maine on July 4, 2017, after Governor Paul LePage signed a $7.1 billion, two-year budget passed by the legislature. The final compromises were over the elimination of a proposed lodging tax increase and the allocation of additional money for public education. House Republicans were able to see the removal of an increase in the lodging tax from 9 percent to 10.5 percent. Democrats got additional funding to Head Start and Clean Election programs, as well as $162 million to go towards K-12 spending.
• Non-essential government services—such as state parks and Bureau of Motor Vehicle offices—were shut down after a budget had not been signed by July 1. The last time Maine’s government shutdown was a 16-day shutdown in 1991. The 2017 shutdown was resolved after three days. Maine’s legislative session was originally scheduled to end on June 21, but lawmakers voted to extend the 2017 legislative session by five days, not required to be concurrent. The cost of the five-day extension of the session was estimated to be $94,600.
• The key issue throughout much of Maine’s 2017 legislative session was a voter approved ballot measure called Question 2, which authorized an additional 3 percent tax on the portion of any household income exceeding $200,000 per year and earmarked the revenue to fund public education. The budget deal included the repeal of Question 2.

Budget and finance ballot measures

Voting on state and local government budgets, spending, and finance
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
Local City budgets County budgets Spending limits School budgets

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

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

1. Maine School Building Authority and Municipal Debt Limits, Proposed Constitutional Amendment No. 3 (1955)
2. Maine Municipal Debt Limit Increase, Proposed Constitutional Amendment No. 3 (1951)
3. Maine Suspension of Legislation Without Adequate Revenue, Proposed Constitutional Amendment No. 4 (1951)
4. Maine State's Borrowing Power, Proposed Constitutional Amendment No. 8 (1951)
5. Maine School Building Authority and Municipal Debt Limits, Proposed Constitutional Amendment No. 5 (1951)
6. Maine Government Aid for Highway Bridges, Question Two (1916)
7. Maine Mining Excise Tax Trust Fund Expenditure, Constitutional Amendment 7 (1983)
8. Maine Higher Education Loans to Parents, Proposed Constitutional Amendment No. 2 (1982)
9. Maine State Guaranteed Loans for Native American Housing, Proposed Constitutional Amendment No. 1 (1972)
10. Maine State Guaranteed Loans for Veteran Housing, Proposed Constitutional Amendment No. 2 (1972)
11. Maine Municipal Debt Limit Increase, Proposed Constitutional Amendment No. 1 (1954)
12. Maine State Retirement System Funds in Trust, Proposed Constitutional Amendment No. 1 (1962)
13. Maine Municipal Indebtedness, Question No. 3 (1911)
14. Maine State Debt Limit Increase, Amendment No. 4 (1919)
15. Maine Public Fund Uses (1926)
16. Maine State and Municipal Indebtedness, Amendment No. 2 (1933)
17. Maine State Debt Limit Increase, Amendment No. 2 (1934)
18. Maine General Highway Fund Use, Question No. 5 (1936)
19. Maine Highway Fund Use (1944)
20. Maine State Guaranteed Loans for Industrial Purposes, Proposed Constitutional Amendment No. 1 (1957)
21. Maine State Retirement System Funds in Trust, Proposed Constitutional Amendment No. 1 (1961)
22. Maine Public Money Appropriations and Accounting, Proposed Constitutional Amendment No. 4 (1964)
23. Maine State Guaranteed Loans for Industrial Purposes Increase, Proposed Constitutional Amendment No. 9 (1964)
24. Maine State Guaranteed Loans on Personal Property for Industrial Purposes, Proposed Constitutional Amendment No. 2 (1965)
25. Maine State Guaranteed Loans for Recreational Purposes, Proposed Constitutional Amendment No. 3 (1965)
26. Maine State Guaranteed Loans for Recreational Purposes Increase, Proposed Constitutional Amendment No. 3 (1967)
27. Maine Temporary State Loans, Proposed Constitutional Amendment No. 5 (1967)
28. Maine State Guaranteed Industrial Loans for Fisheries and Agriculture, Proposed Constitutional Amendment No. 6 (1967)
29. Maine State Guaranteed Loans for Industry, Fisheries and Agriculture Increase, Proposed Constitutional Amendment (1968)
30. Maine Airport Moneys Reallocation, Referendum Question No. 3 (1972)
31. Maine Regulation of Municipal Borrowing, Proposed Constitutional Amendment No. 1 (1973)

Budget and finance legislation

The following is a list of recent budget and finance bills that have been introduced in or passed by the Maine state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

Recent news

The link below is to the most recent stories in a Google news search for the terms Maine budget. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Maine state budget and finances - Google News

Contact information

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

See also

• Historical Maine budget and finance information
• Tax policy in Maine
• Maine government sector lobbying
• Maine public pensions
• Governor of Maine
• Maine State Senate
• Maine House of Representatives
• Maine State Legislature