Maine government purchasing power slips


Maine was among 30 states where tax revenue was lower than the peak since 2006. Map from The Pew Charitable Trusts

Total state tax collections remained near the highest levels since the recession in the third quarter of last year, but the Pew Charitable Trusts found Maine was among 30 states where state taxes receipts remained below pre-recession levels.

The analysis aims to show how the recovery has panned out for state coffers, showing that, collectively, states have 2.5 cents more on every dollar to spend than a 2008 peak, but many state governments have less spending power.

The Pew analysis said an overall rise in state tax receipts masks an uneven recovery in economic activity across the country. Maine is in orange with the sum of all state tax receipts in blue.

An overall rise in state tax receipts masks an uneven recovery in economic activity across the country, according to the Pew analysis. Maine is in orange with the sum of all state tax receipts in blue.

The Pew analysis adjusts tax receipt data from the U.S. Census Bureau for inflation and compares tax receipts with their highest level for each state since 2006.

For Maine, tax receipts remained 5.2 percent below their peak since 2006, which was in the first quarter of 2007 at $1.03 billion. In New England, recovery to peak levels of state tax receipts has been uneven as well, with Massachusetts and Vermont revenues surpassing their peaks since 2006.

Use this interactive chart at Pew’s website to compare state trends.

Of course, as the analysis notes, economic changes and tax structures and policy decisions have an impact on total state revenue as well. The Maine state budget approved in 2011 included a number of tax cuts proposed in some form by Gov. Paul LePage. The state’s tax revenue has been on the decline since that year.

The Pew analysis noted the overall rise in state-level tax revenue has been driven by California, Illinois and Texas, while the 30 other states where state still lags behind their peak level since 2006.

“As states regain fiscal ground lost in the recession, policymakers face pressure to catch up on investments and spending postponed because of the downturn. That may be more difficult in states where tax revenue remains below its previous peak,” the analysis states. “But even a return to peak levels can leave states with little extra to make up for cuts in federal aid or to pay for costs associated with population increases, growth in Medicaid enrollment, deferred needs, and accumulated debts.”

And with a largely stagnant population, that’s at least one thing about which Maine does not have to worry.

Darren Fishell

About Darren Fishell

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.