Maine’s current budget

Governor Janet Mills released her FY 2026-2027 budget proposal and gave the state of state address in January 2025. The FY 2026-2027 budget was enacted in March 2025.

Maine enacted its supplemental FY 2024-2025 biennial budget in April 2024. The budget reported $5.4 billion in general fund spending in FY 2025, an increase of 6 percent over the previously enacted budget. Maine approved a one-time tax rebate for residents in 2023. That tax relief followed tax cuts approved in both 2022 and 2021.

Under the American Rescue Plan, Maine received $997 million in direct state fiscal aid and $383 million in local government aid from the federal government. As of January 2025, Maine had fully allocated its state ARP. States must spend the funds by Dec. 31, 2026.

According to the National Association of State Budget Officers (NASBO), Maine’s total expenditures in fiscal year FY 2025 were $13.0 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2025 were $2.9 trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in California.

According to NASBO, Maine’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2025: $5.5 billion/$14.5 billion
• FY 2024: $5.0 billion/$13.1 billion
• FY 2023: $4.3 billion/$13.0 billion
• FY 2022: $4.0 billion/$12.5 billion
• FY 2021: $3.8 billion/$12.1 billion
• FY 2020: $3.8 billion/$10.5 billion
• FY 2019: $3.7 billion/$8.8 billion

For more on Maine’s budget, see

• the Maine Department of Administrative and Financial Services,
  
• the Maine Bureau of the Budget,
  
• the Maine State Economist,
  
• Maine Open Checkbook, and
  
• the Maine Office of Fiscal and Program Review.

Maine’s budget institutions, rules, and constraints

Maine uses a biennial budget. The legislature is not required to pass a balanced budget, nor is the governor required to sign one, and deficits may be carried over into the following year. However, the state has budget rules that require lawmakers to balance revenues and expenditures. Maine also limits spending growth with a formula based on personal income and population growth. However, the legislature can override the limit with a simple majority vote. The state also limits total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Overview of Maine’s state and local expenditure and revenue sources

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Maine’s combined state and local direct general expenditures were $16.1 billion in FY 2022 (the most recent year census data were available), or $11,607 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $12,083.

Maine’s largest spending areas per capita were public welfare ($3,607) and elementary and secondary education ($2,241). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Maine’s combined state and local general revenues were $17.9 billion in FY 2022, or $12,892 per capita. National per capita general revenues were $13,619. Maine uses all major state and local taxes. After federal transfers, Maine’s largest sources of per capita revenue were property taxes ($2,557) and individual income taxes ($1,865).

Maine’s economic trends

Maine’s per capita income (per the Bureau of Economic Analysis) was $68,129 in 2024, ranking 26th among the states. It was below both the national average of $72,425 and the New England regional average of $82,021. The state’s median household income (five-year estimate) was $74,733 in 2024, ranking 32nd among the states and below the national average of $80,734. Maine’s poverty rate was 10.7 percent in 2024 (five-year estimate), below the national rate of 12.5 percent.

Although Maine’s averages tell a story about the entire state, Maine is composed of diverse localities. For example, the city of Lewiston’s median household income was $55,393, and its poverty rate was 20 percent; the city of Saco’s median household income was $92,241, and its poverty rate was 6.4 percent.

Maine’s unemployment rate has historically been below the national average.

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. However, Maine does not currently have enough information available for the Bureau of Labor Statistics to break down its unemployment rate by race.

The major industries that contributed the most to Maine’s gross domestic product (GDP) in 2024 were finance, social services (i.e. health and education), professional services, government, and retail. Social services , government, and retail contributed more to Maine’s GDP than they did to the nation’s and region’s GDP, while professional services was less important to Maine than it was to the nation and region in 2024.

Looking at more specific industries, among those that accounted for at least 1 percent of Maine’s GDP in 2023, real estate produced more for the state than for the nation, contributing 16.1 percent to Maine’s GDP and 12.4 percent to the nation’s. Other industries that overperformed in Maine relative to national averages in 2023 were retail, hospitals, transportation equipment manufacturing, and management of companies.

Maine’s politics

Governor Janet T. Mills, a Democrat, was elected in 2022 with 56 percent of the vote. The next gubernatorial election is in 2026.

Democrats control both the House of Representatives (76 Democrats to 73 Republicans and 2 independents) and Senate (20 Democrats to 15 Republicans). Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Maine. The entire legislature is up for election in 2026 because both representatives and senators serve two-year terms.

Maine’s demographics

As of July 2024, Maine’s population was 1,405,012. That was up 5.8 percent from 2010. The state’s population growth rate was slower than than the nation’s 9.9 percent growth over the same period. The Urban Institute estimates the state’s population will increase 4.5 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.