Without federal stimulus funds, states have continued to provide targeted assistance to their populations. Several states, including Maine, have already sent or are in the midst of issuing stimulus payments. Gov. Janet Mills is pursuing an increase of approximately $250 in the inflation stimulus check. Mills’ decision to boost the size of the inflation stimulus checks follows an assessment by the state commission of an increase in state revenue.
Check On Inflation Stimulus Increase
Following a meeting of the state’s revenue forecasting commission on Tuesday, Mills announced her intention to increase the size of the inflation stimulus checks. The panel anticipated an additional $411.6 million in income until June 2023. The commission previously estimated the state’s revenue at $822 million.
Mills chose to utilise half of the anticipated revenue bump to increase the state’s inflation stimulus check to $750. The inflation stimulus payment will benefit around 800,000 Maine residents and will begin to be sent in July if Mills’ supplemental budget proposal is approved by the state legislature.
“….I will propose returning at least half of this increased revenue to taxpayers, consistent with my existing proposal and Republican demands, as well as other financially sensible methods to assist Maine residents during these difficult times,” Mills said in a statement.
Mills’ proposal, if enacted, would increase the size of the inflation stimulus check while simultaneously providing “tax relief to working Maine families and seniors.” Additionally, the proposal calls for two years of free community college for kids impacted by the coronavirus outbreak and a restructured student loan payback program in the state. Additionally, the proposal provides additional funding for Maine hospitals and nursing facilities.
Can Revenue Forecasts Be Believed?
While Mills’ idea to return money to the state’s taxpayers has been applauded, analysts have warned the governor that the future years would be uncertain.
“However, economists warn us that revenues, especially in later years, are highly variable and should not be relied upon,” Mills said.
According to economists, economic uncertainties, such as geopolitical tensions and rising inflation, could affect the prices of everyday products. In such a scenario, it becomes even more critical to increase tax revenue to offset the inflationary effect. However, analysts feel that revenue predictions cannot be relied upon entirely in such an unstable environment.
“These revised income predictions come at a time of national economic uncertainty,” Kirsten Figueroa, Commissioner of the Department of Administrative and Financial Services, said.
She stated that oil prices have risen from $72 to over $100 per barrel in recent weeks, while consumer price inflation is at its highest level in 40 years. Figueroa also noted that the Russian-Ukrainian conflict could exert more pressure on energy prices and financial markets.
“We will closely watch actual revenue growth in comparison to these revised estimates,” Figueroa stated.