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Revenues Fall Short, Leaving 2015 Budget In Deficit

by | Apr 30, 2015 7:42pm () Comments | Commenting has expired | Share
Posted to: State Budget, Taxes, State Capitol

CTNJ file photo 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.

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Comments

(7) Archived Comments

posted by: Biff Winnetka | April 30, 2015  8:43pm

Wow.

Ben Barnes had projected a 25% increase in income tax revenues.

Over Promise.
Under Deliver.

It’s the Connecticut way!

Ben Barnes has been elevated WAY beyond his capacities.  Which of course is what makes him so useful to Malloy.

posted by: justsayin | May 1, 2015  5:09am

Malloys goal all along was to keep it under the number where he had to submit a plan to legislature. Barnes and the gang did that for him. Now hit the rainy day fund, mission accomplished. This what you all voted for!

posted by: art vandelay | May 1, 2015  6:31am

art vandelay

Democrats own this fiscal mess lock stock and barrel.  Their policies have failed.  People and businesses have packed their bags and left.  The only surplus created by Democrats is abandoned factory buildings

posted by: UConnHoop | May 1, 2015  6:59am

Spend, spend, spend.  Tax, tax, tax.  Unfortunately we had a referendum on Malloy & the Dems and apparently the people of this state are happy with these policies.  It is so utterly frustrating to watch the downward spiral that our state is in and know that either people don’t care or are happy to get what they can while they can.

posted by: dano860 | May 1, 2015  8:24am

....and they think increasing the tax on the wealthy among us is the answer?
They are leaving the State now just to evade the death tax.
Maybe the ‘Penn & Teller’ money team of ‘Walker & Bye’ can whip up another magic pot of cash. Oh, right, the ‘rainy day bucket’, let’s drain that.

posted by: One and Done | May 1, 2015  9:08am

In the private sector under Sarbanes Oxley, making these phony forecasts could land you in prison.  In Hartford they give you a nice fat pension. 

What happens when the real deficit shoots up to half a billion in the next two months?

posted by: SocialButterfly | May 1, 2015  9:42am

This sad state of affairs is a result of “voters who needed to have their heads examined” in electing a politically disastrous Democratic Dannel Patrick Malloy administration employing failed Obama spending policies to give Connecticut a death sentence patterned after Obama’s $23 trillion dollar national deficit. The blame lies with our stupid voters
which have left our state beyond fiscal repair. Malloy gets credit for his partially taxpayer-paid slimy election campaign to get himself and his second-class political mafia-team reelected to office.

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