Maine’s fiscal year ended last month with nearly $600 million in excess revenue, two-thirds of which was added to the state’s fiscal stabilization fund, Gov. Janet Mills’ office said Friday. .
The so-called “rainy day” fund stands at a record $896 million after injecting about $400 million. The total is 16.6% of the previous year’s earnings and slightly less than the 18% maximum allowed by state law.
Additionally, $135.5 million of last year’s surplus will go to funding highways and bridges and $15 million will go to a newly created Education Stabilization Fund to help the state fund public schools at 55%.
“The state continues to operate in a fiscally responsible manner by building the rainy day fund and avoiding the need to bond for transportation projects,” said Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services, in a press release.
With the extra money, the Department of Transportation now has an additional $291 million in general support funds for capital projects.
Under state law, the state must balance its budget. Any surplus each year must be allocated to certain accounts, the most important of which is the fiscal stabilization fund intended to protect against loss of income in the event of an economic crisis or other emergency. That could come into play if the country slips into a recession, which looks increasingly possible as federal regulators move to stem record inflation.
A high balance in the provident fund also helps the government when borrowing money from the bond market, as it allows for lower interest rates with high scores from rating agencies.
This is the second consecutive year of strong financial performance in the wake of the pandemic. Last year, the Mills administration added $282 million to the rainy day fund.
Democratic leaders have credited the administration for keeping state finances stable during a time of uncertainty.
“Over the past two years, my colleagues and I have worked hard to pass common-sense budgets that benefit working families, communities, small businesses and retirees,” Senate Speaker Troy Jackson said. Allagash in a statement. “At the same time, we continued to put money aside in the Rainy Day Fund for the future. As a result, Maine’s Rainy Day Fund is now at its highest ever in state history – nearly $900 million. This historic number ensures that the Legislative Assembly will be able to deliver on its promises to Mainers, no matter what comes our way.
Republicans, meanwhile, have criticized the Mills administration for relying heavily on federal dollars, including hundreds of millions of dollars in pandemic relief, to present a rosier financial picture.
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