(The Center Square) – Given the steep decline in taxable sales since last year, concerns continue about how the corresponding decrease in revenue collection will impact Maine’s budget, government services and struggling businesses.
Although revenue losses in the hospitality sector were not as steep as feared – roughly $200 million year-to-year in July – the impact is no less severe.
“The loss in revenue has already resulted in Gov. Janet Mills signing a curtailment order to keep Maine's finances above water,” Jacob Posik, director of Communications at the Maine Policy Institute, told The Center Square.
Compounding the issue are the spending allocations in the current budget.
“Roughly $800 million in new spending compared to our last budget,” Posik said. “Now Maine finds itself in a situation where it needs to raise revenue or make cuts to keep its fiscal house in order.”
Mills' lockdown orders prevented much needed dollars from getting to the state’s coffers, Posik said.
“If she respected the individual rights of Maine citizens and trusted them to take the necessary precautions to protect themselves and their loved ones, we wouldn't have lost so much revenue," he said. "The virus would have resulted in negative impacts to business and state revenue collections on its own – Mills' ridiculous decision to lock down the entire state only made these matters worse."
It remains unclear what the state can do to recoup the drastic loss in funds.
“The governor has instructed her department heads to propose up to 10% in cuts from their budgets, but she has also said she doesn't want to fire any state employees, cut education spending or end any programs,” Posik said, adding that the cuts should start with the current budget’s $800 million in additional spending.
Closing the gap by raising taxes should not be on the table, Posik said.
“Mainers have been dealt enough economic harm at the hands of their government,” Posik said. “This pandemic should be a wake-up call to Gov. Mills and her allies in the legislature that there are limits on what government, and the people who fund government, can afford.”