State To End 2014 In The Black
Just five days away from the end of the fiscal year, Connecticut is expected to end 2014 with a $33.2 million surplus, according to the governor’s Office of Policy and Management.
In his monthly letter to state Comptroller Kevin Lembo, Budget Director Ben Barnes said the surplus number was reduced about $10 million from last month because of a drop in revenues.
Revenues were revised downward because the federal government did not reimburse the state for $65 million in services provided by the Departments of Mental Health and Addiction Services and Developmental Services.
“OPM and the agencies remain actively engaged with the federal government in resolving issues relating to claiming methodology and allowable costs,” Barnes wrote. “While we remain hopeful for resolution before the fiscal year ends, we have assumed for forecasting purposes that this revenue will be delayed until FY 2015 or, worst-case, not reimbursed by the federal government.”
Barnes said personal income tax receipts have not been updated since last month. But the legislature’s nonpartisan Office of Fiscal Analysis said “collections data received through June 24, 2014 indicates that June estimated payment collections will likely meet or exceed targeted levels.”
Nonpartisan analysts said that while personal income tax receipts will be tallied through early August, it’s assumed that withholding collections will remain above the targeted 1.9 percent annual growth rate.
The corporation tax was revised upward by about $10 million by Barnes’ office and by about $13 million by OFA.
Nonpartisan fiscal analysts projected that the state would end the year with a slightly higher surplus than Malloy’s budget office. They projected a $42.4 million surplus.
Lembo is expected to certify the 2014 budget numbers July 1.
Any surplus will be deposited in the state’s rainy day fund. Nonpartisan analysts are predicting the state will face a $1.278 billion deficit starting in fiscal year 2016.