On September 30, Maine’s Department of Administrative and Financial Services Commissioner, Kirsten Figueroa, released the Department’s four-year revenue and budget forecast, estimating a projected $949 million structural gap for the 2026-2027 biennium. This figure includes the projected shortfalls in both the state’s General Fund and Highway Fund. In short, based on current revenue and spending trends, Maine’s expenditures in 2026-27 are expected to be almost $1 billion greater than its revenue.
There has been little coverage of this shortfall, and much of that coverage has been dismissive. While the context of previously predicted budget shortfalls is necessary to understand this prediction, the overall context of this projected shortfall should make DAFS’ recent estimates even more concerning. The Mills administration will need to make significant changes to upcoming expenditures, or increase taxes, to keep Maine’s budget balanced as required by law.
Maine has had a projected biennial budget shortfall for decades, and it typically serves as a starting point for budget negotiations and planning. However, projected budget shortfalls or surpluses are calculated based on costs and revenue trends from recent years, and the trends from Maine’s most recent budgets are worrying.
If one observes the budget trends of Maine’s last three governors, it becomes apparent that the current administration is engaging in highly volatile spending practices. The best way to understand this is to compare recent shortfall projections to those under other governors. During Gov. Baldacci’s tenure, Maine suffered a massive budgetary crisis during the recession that required significant cutbacks in spending, and this, at its peak, led to a $654 million leap in projected shortfall between the 2010-11 cycle and 2012-13.
Governor LePage’s administration was not perfect, but a gradual reduction in projected shortfalls occurred during most of his time in office. The 2020-21 cycle was an exception to this, and while specific causes are unclear, the shift in governors and party control of the legislature may be a partial cause.
Despite alleged fiscal restraint, Governor Mills’ administration has overseen increased shortfalls and increased projection volatility. Between the 2020-21 predictions under LePage (made two years prior, in mid-2018) and the 2022-23 projections made in 2020, a nearly $300 million shortfall growth occurred. The shortfall faced rapid fluctuation from 2024-25, partly due to federal funding and inflation. However, it faced a tremendous explosion in the recent 2026-27 projection.
Maine’s projected 2024-25 shortfall was around $408 million, but it has more than doubled to $949 million. This is a growth of $541 million to the projected budget shortfall, which is 80% of what we faced under the massive cuts with Baldacci.
With the rapid increase in government spending since COVID and the sunsetting of federal stimulus sources, it is clear that Maine’s spending habits will have to change soon if we are to avoid outright calamity due to the rapid growth of government experienced during Mills’ tenure.