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In addition to the
effects on budgeted revenue, this bill also requires that 40% of any General
Fund revenue exceeding the General Fund appropriation limitation as well as a
portion of any uncommitted resources in the unappropriated surplus of the
General Fund, also known as the Cascade, must be transferred at the close of
each fiscal year to the Tax Relief Fund for Maine Residents. Based on currently budgeted revenue, no
transfers of General Fund revenue in excess of the appropriation limitation
are expected through the end of fiscal year 2014-15. If actual revenue in these or later fiscal
years exceeds budgeted revenue, leaving an excess for year-end distribution
to the Fund, the balance, when sufficient, would be used to replace the
revenues that would be lost by reducing individual income tax rates. The
amount of rate reduction that would occur in any tax year is to be determined
solely by reference to the balance of the Fund and the revenue that would be
lost by any rate reduction effective for the following tax year. Since the
funding for the rate reduction is non-recurring and the rate reductions
permanent, it is possible that the bill could result in significantly reduced
revenues for all years following the implementatuion of a tax rate
reduction. |