State budget stung by dip in revenue
Legislators worked hard last month to close the $365 million budget deficit for fiscal year 2013, which begins July 1, but declining state revenue projections have cut into some of their efforts.
State Comptroller Kevin Lembo reported Jan. 2 that the remaining budget deficit after the Dec. 19 budget deficit mitigation bill was $40 million.
Total revenues are projected to be about $35 million less than what was predicted in November, according to the consensus revenue report by the Office of Policy Management and Office of Fiscal Analysis.
A $35 million decrease in revenue, plus the remaining $40 million budget deficit, brings the state's total deficit projection to more than $70 million for fiscal year 2013.
"The decline in revenue projections is not surprising. The economy and state government finances are extremely difficult to project in these unusual times, particularly given the significant and shifts in income tax revenue that occur surrounding the dates of major tax changes," wrote Benjamin Barnes, secretary of the Office of Policy and Management, in an email Tuesday in response to questions from The Connecticut Mirror.
The tax revenues that are projected to decline the most are personal income tax, by $71.4 million, and sales and use tax, by $129.9 million. Other tax revenues that are expected to drop include the corporation tax revenue, by $10 million, and the cigarettes tax revenue, by $1 million.
Anticipated revenues from casinos also declined by $11.5 million. The Mohegan Tribe and Mashantucket Pequot Tribal Nation give Connecticut a 25 percent share of their slot machine revenues, which have steadily declined over the years.
The consensus revenue report also showed that total revenues are expected to be down by $68.3 million for fiscal year 2014.
The aim of the special session in December was to close the fiscal year 2013 budget deficit of $365 million but also to create savings for the coming budget year.
These updated revenue projections affect that plan and make it likely that the budget deficit for fiscal year 2014, which begins July 1, 2014, will remain at more than $1 billion. The budget deficit for fiscal year 2014 is currently estimated to be $1.1 billion.
In response to the report, Barnes said, "We will continue to closely monitor state revenues in order to maintain balance in the state budget this year and through the coming biennium."
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