Maine finished its 2008 fiscal year with a general fund surplus of $56 million, the state announced last week. Most of the surplus, $43.7 million, will be used to pay past-due bills to hospitals. The remainder will be put toward the budget stabilization fund, which has grown from zero to $128.9 million in the past five years.
“The year-end surplus is the result of a disciplined budget approach,” Gov. John E. Baldacci said in a press release. “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 warned that troubles with the national economy and high energy prices could erode revenues in fiscal 2009.
State Controller Edward Karass was guarded about the significance of the surplus in a report to the governor.
“Although we did not finish the fiscal year with a robust cash balance in the general fund, it is a noteworthy accomplishment that for the second consecutive year we did not require any outside cash-flow borrowing through a [tax anticipation note] or a temporary line-of-credit to manage our affairs,” the report said.
The controller’s report said the state’s narrow cash position in its general fund coupled with a plan to advance fund payment for teacher retirements may require cash-flow borrowing in late winter or early spring.