Personal Taxes

The sharp surge in personal earnings in Maine is predicted to subside when federal assist ends

Maine ranked in the top 10 U.S. states with strong increases in personal income for the first three months of this year, but that’s likely to decline as the federal pandemic benefits wane, a new study found.

According to a study by the Pew Research Center released on Wednesday, multiple rounds of aid programs have increased personal incomes to record highs in more than half of the US states and increased revenues in most states.

That surge will be temporary, however, as federal unemployment benefits come to an end, including the completion of the $ 300 weekly bonus on Saturday from the latest $ 2.9 trillion stimulus package. Maine’s Back to Work program, which offered up to $ 1,500 to help employers attract workers, ended on August 20.

Maine personal income adjusted for inflation rose 18.2 percent from January to March this year, compared to the same point in time last year, according to Pew. This is number 9 among the US states and well above the national average of 14.4 percent. Before the pandemic, Maine personal income growth averaged just 1.4 percent from the last three months of 2007 to the same months in 2019.

Personal income includes paychecks, social security benefits, employer contributions to retirement and health insurance, income from rent and other property, and social assistance benefits. Capital gains such as equity investments are not included. Federal officials use the state’s personal income to allocate assistance to programs like Medicaid, while state governments use the information to forecast tax revenues and estimate the cost of public services.

In most states, personal income from merit, including wages and additional allowances such as employer-sponsored health benefits, also increased. Maine’s earnings rose 3.95 percent for the first three months of this year compared to the same period last year.

According to Pew, it benefited from the sharp increase in government aid, which rose 74 percent annually compared to the first three quarters. Without this, personal income would have risen by just over 2 percent.

As pandemic aid will decline significantly from April to June, personal income will also decrease significantly compared to the first three months of this year, according to the US Bureau of Economic Analysis.

At the same time, jobless claims have plummeted in Maine. About 900 people filed an initial application or opened their jobless application for the week ended August 28, the Maine Department of Labor said Thursday. That’s almost 300 fewer applications than the week before and the lowest total since the COVID-19 restrictions came into effect in March 2020.

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