Revenues Fall Short, Leaving 2015 Budget In Deficit
Nonpartisan legislative analysts and Gov. Dannel P. Malloy’s budget office agreed Thursday that revenue dropped $67 million below expectations between January and April, adding to this year’s budget deficit.
The increase in tax revenue anticipated following the April 15 deadline wasn’t realized, according to budget analysts. In fact, personal income tax collections fell $65.5 million short of projections.
Office of Policy and Management Secretary Ben Barnes had forecasted 25 percent growth in personal income tax receipts.
In addition to the disappointing revenue figures, Barnes projected that the state currently has a $161.7 million deficit based on the new revenue figures. State Comptroller Kevin Lembo is expected to certify the deficit Friday. If Lembo’s deficit is more than $175 million, then Malloy will be forced to submit a deficit mitigation plan to the legislature.
The legislature’s nonpartisan Office of Fiscal Analysis said the new revenue numbers mean the state is running a $184 million deficit, which is a slight improvement over its March $191 million deficit projection.
But Barnes remained optimistic the administration will be able to handle the deficit on it’s own without the legislature’s help.
“There are still two months in the fiscal year until June 30th. We will take appropriate action to achieve additional cost savings and keep our state’s budget balanced for the year,” Barnes said in an email.
Malloy insisted on the campaign trail that Connecticut would not end the fiscal year with a deficit and promised he could handle any shortfall on his own issuing at least three budget rescissions since last November. None of his attempts have erased the deficit, but they have kept it under the amount that would force him to send a deficit mitigation plan to the legislature.
Republican lawmakers like Senate Republican leader Len Fasano, R-North Haven, have been asking to help reduce this year’s deficit for months, but have been ignored by Malloy and the legislature’s Democratic majority.
“Month after month, in letter after letter, we have warned Gov. Malloy that hesitation will lead to devastation,” Fasano said. “Despite those repeated warnings, Gov. Malloy has been either unable or unwilling to confront our state’s fiscal crisis. Republicans have offered him solutions and advice, and he has dismissed us time after time. This mess is Gov. Malloy’s. It’s a reflection on his leadership. Unfortunately, state residents will be the ones who will have to clean this mess up.”
Fasano wrote Malloy earlier in the day Thursday and asked if he planned to use part of the $519 million in the Rainy Day Fund to cover this year’s deficit.
House Minority Leader Themis Klarides, R-Derby, said that’s probably the only choice he has left.
“The Governor promised we would end the year in balance but with this latest news, that appears unlikely,” Klarides said. “The possibility of covering a deficit with Rainy Day funds was not what anyone had in mind when he made those promises.’’
The administration and OFA made the revenue data available to the public on state website Thursday at 7:30 p.m.