Budget office warns of growing shortfalls

Gov. M. Jodi Rell said her budget office is warning that the budget shortfall for the current fiscal year is growing while the project deficit for Fiscal 2009 has increased to as much as $150 million. 

In a letter to state Comptroller Nancy Wyman, the Office of Policy and Management said the shortfall for the current fiscal year is now estimated at $52.9 million. The main reason for the current-year deficit is lower-than-expected collections from personal income taxes, which are $90 million below projections, according to the governor’s office. 

“We are seeing fall-offs in collections of a wide range of taxes and fees – everything from income taxes and real estate conveyance taxes to the cigarette and insurance company taxes, ” Rell said in a statement. “All of these reflect the softening national economy. We continue to position our state to do well when the economy picks up again, as it inevitably will. In the meantime, however, we must make sure that our spending is controlled.”

In an effort to reduce expenses, Rell has put a ban on out-of-state travel, has limited the use of state purchasing cards and instituted reductions in the use of state vehicles and gasoline consumption.