Maine state budget finished year with $59M surplus

AUGUSTA, Maine—The state's general fund and highway budget both finished the fiscal year with modest surpluses but Gov. John Baldacci warned Monday that high energy prices and a sagging economy "could further erode revenues" in the coming year.

State officials announced a general fund surplus of $56 million and a highway fund surplus of $2.5 million for the year that ended June 30.

"The year-end surplus is the result of a disciplined budget approach," Baldacci said. "Maine faced a grim economic picture earlier this year that required the state to make many difficult decisions. That hard work has allowed us to finish the year in a good position."

Baldacci and state lawmakers closed a projected $190 million budget gap earlier in the year. But Baldacci warned that there will likely be additional challenges in the second year of the $6.3 billion budget.

"Unfortunately, high energy prices and a still-struggling national economy could further erode revenues in the next fiscal year," Baldacci said.

After accounting adjustments, the state will deposit $10 million into the so-called rainy day fund, which will total $128.9 million. The state has total reserves of about $169.5 million between the rainy day fund and the separate working capital fund, said Baldacci.

Also, another $43.7 million will be used to bolster payments to hospitals, and $935,000 will be available for the coming fiscal year.

"We are building our reserves, which strengthen our overall financial standing, and we are honoring our commitments," Baldacci said.