- January 5, 2017
- Maine Center for Economic Policy
- Staff Report
The state budget lays the foundation of a strong economy and thriving communities. For Maine to prosper, the budget must address shared problems and work to meet common goals. Good budgets raise enough revenue to make investments that build a stronger workforce, help young families make a good start, support modern infrastructure, and address other goals that benefit all of us now and in the future. However, recent state budgets undermined our ability to meet these goals and instead prioritized tax breaks for the wealthiest Mainers.
Tax breaks that have predominantly benefited wealthy Mainers and corporations jeopardized state capacity to make key investments in a healthier economy and the wellbeing of Maine people. For 2015, general fund spending as a percent of state GDP was at its lowest in 25 years apart from 2010 and 2011 when tax revenue was hard hit by recession. That means state revenue hasn’t kept pace with the costs of maintaining state services or making additional needed investments and costs have shifted to local communities as a result. The voter approved education funding initiative will help buck this trend by increasing taxes on high income households, but more changes are needed to grow and diversify revenue sources to invest in all the elements of a stronger economy.