Despite surplus, state officials pessimistic

Portland Press Herald, May 23, 2008

(excerpt) State finance officials say gains by better-off taxpayers and by energy companies enjoying the effects of high oil prices have buoyed Maine tax collections, at least temporarily.

But the legislative budget writers on the Appropriations Committee were told Thursday that the longer-term view is generally pessimistic.

Some of the revenue negatives for the state:

Total taxable sales for the month of March, counted as April revenue, were down 5 percent from March 2007, and the annual rate of growth was 1 percent.

General merchandise sales -- described as primarily sales of goods sold in large department and discount stores -- were down 5 percent for the month and flat for the year.

Auto/transportation sector sales were down 6 percent for the month and flat for the year, while building supply sales were down 7 percent for the month and 3 percent for the year.

If energy prices stay high, they will drain away dollars available for discretionary spending, cutting into sales tax receipts.