State revenue projections could be thrown off by the repeal of a school funding initiative.
The state’s Revenue Forecasting Commission says while the economy is growing and revenues are up, it will be hard to predict how the math will work out come tax time. That’s because for the first six months of this year, Maine had in place an income tax surtax on high earners that was passed by the voters to increase school funding. But the Legislature repealed that surtax in July, throwing projections out of whack.
Mike Allen of Maine Revenue Services, who chairs the group, says the demise of the surtax could affect revenues in two ways: larger refunds and lower final tax payments.
“We have tried to take that into account but it is just hard to figure out exactly how much that is,” he says.
The panel says it will wait until the spring forecast to see if the cost of the lost surtax exceeds the $6 million in additional revenue projected over the two-year budget.