Numbers due out next week will show that retail sales in the state bounced back some in July after months in the doldrums thanks to nationally advertised deals on automobiles and what looked like a decent month for tourism.
Mike Allen, the chief economist for the Maine Revenue Service, said tax revenues all around, including sales, income and estate taxes, for August should be close to budget.
“We may be a little shy on sales tax,” which reflect sales made in July, but it’s an improvement, Allen said.
Now Allen gets to start worrying about what energy prices are going to do to home heating costs, which in Maine have a big impact on people’s general spending habits.
“It scares people more than the gasoline does,” Allen said of the price of home heating fuel. “The psychological aspects are as economically hurtful as the actual dollars that are removed from people’s discretionary spending.”
Allen blamed last winter’s high heating fuel prices on the sales tax doldrums that stuck with the state in the first quarter of this year even as the rest of the country was seeing sales tax increases.
For the first three months of the calendar year, Maine sales tax revenue fell 1.2 percent compared to a national growth rate of 5.8 percent, according to the state revenue department. Maine was one of only three states in the nation to experience that decline.
The state ended the fiscal year on June 30 in the black because of a surge in income tax revenue that easily made up lagging sales.
Last month, the state beat its revenue budget thanks to a one-time windfall of $6 million in estate taxes tied to one property. The month closed $2 million over budget with all revenue categories combined, but was $2.6 million down on the sales tax line.
Comments are no longer available on this story