STATEMENT: Revenue forecast shows urgent need for Congress to increase state aid

Without revenue solution, state will be forced to make deep cuts that hurt Mainers and make the recession worse

AUGUSTA, Maine — Sarah Austin, the lead analyst on tax and budget for the Maine Center for Economic Policy, released the following statement in response to the state’s preliminary revenue reforecast, which anticipates a shortfall of more than $1.4 billion over the next three years:

“Solving this unprecedented crisis is essential to protect Mainers’ jobs, guarantee services essential to our economy and to families’ well-being, and to power the state’s recovery from the pandemic recession.

“We cannot cut our way out of this crisis. Research shows that cuts during a recession delay economic recovery. Balancing the state’s budget through cuts would mean layoffs of public-sector workers such as teachers and social workers at a time when unemployment is already at record highs — not to mention cuts to services important to the state’s recovery, such as education, health care, and transportation.

“Instead, Maine’s federal leaders must reject the recent proposal from Senate Republicans — which does nothing to increase emergency funds for states — and act quickly to pass a COVID-19 relief package that includes emergency grants to backfill Maine’s revenue shortfall. State policymakers also can do their part by passing pending bills to raise revenue by closing tax loopholes for the wealthy and for Wall Street — both of which have withstood this recession far better than the families and communities who would be hurt by an inadequate policy response.”

BACKGROUND: The US House of Representatives in May passed the HEROES Act, a pandemic relief package that included $1 trillion in emergency funds for the public sector. The US Senate has not held a vote on the HEROES Act. Majority Republicans in the Senate on Monday released their own plan, the HEALS Act, which contains no additional funding for states, territories, tribal governments, or municipalities.

The Maine Legislature is currently in possession of several bills that would increase state revenues or protect local revenues by improving Maine’s tax code, including proposals to strengthen Maine’s estate tax, close a corporate tax loophole for multinational corporations and prevent big-box stores from manipulating local assessments to avoid paying property taxes.


Mario Moretto
(207) 620-1101