10/1/98
Gov. Angus King's financial alchemist, Janet Waldron, says
that if consumers continue to have confidence in the state of the
nation "than the national, regional and Maine economies will
continue to grow albeit at a slower rate."
King echoed confidence in Maine's economy especially its summer
tourism which he said had increased spending of 17 percent in the
past two years.
The August '98 revenues of undedicated funds was listed at
$6,501,956 over projections. However, the King Administration did
some interesting alchemy with the revenue statistics concerning
this $6.5 million or 3% over budget figure. The correct figure
should be about $18 million because $11.5 million was collected
and then set aside in a special reserve fund to offset a one-half
cent reduction in the sales tax and not added to the $6.5 budget
surplus.
Why this accounting tabulation is not clear except to
underestimate the actual surplus so it can be used at a future
date.
Despite the doubling of the cigarette tax last year, Maine
smokers continue to light up over projections. It should be noted
that the doubling of the cigarette tax was accompanied by plenty
of anti-tobacco hype especially aimed at kids. But from the added
$30 million in revenue cigarette taxes only about $3.5 million is
going into "tobacco education." The remainder is going
to the general fund "for tax relief" or whatever the
governor and legislature consider future tax relief.
Another sin tax, booze revenue, was down about $1 million for the
month with a year-to-date negative variance of $774,336. The
administration says this is due to the increase in the cost of
liquor and slow sales of liquor ( and New Hampshire's cheaper
booze?). The total budgeted liquor sales for the fiscal year
ending 6/30/99 is $24,248,824.
Maine gamblers hang in there and the state has them pretty well
pegged. The state estimated that foolish gamblers would spend
$6,837,756 million in August on lottery come-ons. The actual
revenue was $6,897,900. The total budgeted lottery revenue for
the fiscal year ending 6/30/99 is $41,112,981.
Maine's building supply sector, which includes hardware stores,
lumber yards, plumbing and electrical materials, refrigeration,
etc, shows a healthy growth up 17.7 percent over July 1997.
General merchandise revenue which includes department stores
sales and home furnishings were up 7.6% for the month, but
taxable sales in food stores were down 5.7% for the month.
So what's the big cash income item for dear old Dirigo? It's the
sales and use tax which Gov. King said could not afford to take
cut until a law required him to do it. King even dodged his no
sales tax cut this year stand sending the decision to the Maine
law court for a decision. It was a no-brainer. The court said cut
the sales tax one-half percent now, stupids, it's the law.
The sales and use tax for August was $94,054,536. This fat cash
cow has a total budgeted FY'99 revenue of about $777 million.
The next biggest cash income for the state is the individual
income tax. For August some $83 million was collected and the
total budgeted number for FY'99 is $785,882,253.
Numbers, numbers, numbers. A million here, a million there, hey!
it adds up.
In the merry month of August, Inland Fisheries and Wildlife
collected $1.2 million well on its way to a $14 million annual
budget. From the naughty, the state collected $2.6 million in
fines, forfeits and penalties. And another $1.5 million in
current service charges whatever they are. And $303,564 from
"private sources" whomever they are -and why?
The pari-mutual and amusement taxes for August was $80,000,
banking taxes $587,010, motor vehicle licenses $101,984 and $339
clams for aeronautical gas taxes which is hardly a fill-up for a
skyliner.
The highway fund taxes, which is a country within a state, made
out very well, thank you, for the month. Fuel taxes were $14.8
million, registration fees $5.4 million and inspection fees
$129,318. Transportation costs take an increasingly big bite out
of Mainers. In July of 1990, the automobile /transportation
taxable sales were about $1.6 billion. In July, 1998 they were
$2.7 billion.
Get a horse.
A whole new bunch of politicians will be coming to Augusta in
December following the November elections. Just about all say no
new taxes and let's have more tax relief. Don't believe a word of
it. It's the same words used by legislators and governors for
decades. Ten years ago Maine government was a $1.5 billion
operation. Today it's $4 billion.
Politicians, once sane and fine folks, take seats of power and
are transformed under the tax man's axiom attributed to France's
first minister of finance and chief advisor to Louis XIV. He
said, "The art of taxation consists in so plucking the goose
as to obtain the largest amount of feathers with the least amount
of hissing."
[Note: This column first appeared in the Ellsworth American, 10/1/98]