Barnes Estimates $33.6M Deficit
There may be no end in sight to deliberations over gun control, but the state budget forecast has gotten rosier over the past month, according to Gov. Dannel P. Malloy’s budget director.
In his monthly report to state Comptroller Kevin Lembo, Malloy Budget Director Ben Barnes predicted that the state will end the year with a $33.6 million deficit, an improvement of $22 million over last month.
The forecast includes the results of the December deficit mitigation and the hiring freeze instituted on Jan. 22, but it does not include the impact of federal budget cuts.
“Our best estimate at this time is that sequestration will result in little immediate state budgetary impact, but the economic impact of these cuts, especially in the defense sector of Connecticut’s economy, could have a significant effect on revenues going forward,” Barnes wrote.
According to Barnes, revenues are down about $6.5 million from last month, but the inheritance and estate tax have been revised upward by $30 million due to larger than normal collections. The cigarette tax is down $5 million, Indian gaming revenue is also down about $7.1 million and tax refunds are expected to exceed their current projection by $8 million.
April still remains an important month for income tax collection since 40 percent of income tax receipts have yet to be collected.
Projected state spending is down $133.5 million, but there remains about $314.4 million in deficiencies.
The biggest deficiency is still the $255 million the Department of Social Services’ Medicaid account. The Department of Corrections is also running an estimated $22 million deficit. However, the state still anticipates spending $447.9 million less than originally projected.
Still Barnes projections have been far rosier than those projected by Lembo and the legislature’s Office of Fiscal Analysis.
Earlier this month, Lembo projected that the state would end the year with a $131.1 million deficit, more than double the amount predicted by Barnes at the end of February and almost four times the amount Barnes estimated in this latest report.