Connecticut received more sobering financial news Thursday as the state Office of Fiscal Analysis released a report projecting a $266.1 million deficit for the current fiscal year, and more than $900 million deficit next year.
The state’s current fiscal year deficit grew by $198 million over the last month, OFA said, largely due to a significant decline in projected income tax revenues.
Lower than projected state revenues from capital gains, dividends, and other investment income has been the primary culprit of Connecticut’s financial struggles, which can be attributed in part to stock market fluctuations, the nonpartisan OFA said.
Connecticut’s worsening financial position comes as lawmakers work in the current legislative session to balance this and next year’s budgets. Legislative leaders on both sides of the aisle, as well as Gov. Dannel P. Malloy, have sworn off tax increases, but that pledge will be harder to stand by as the state’s finances continue to deteriorate.Â
Senate Minority Leader Leonard Fasano (R-North Haven) said in a statement, “These numbers are appalling. The state is in a freefall and people should be scared. What’s even more terrifying is that these numbers only represent the best case scenario. If a recession comes, this will be much worse.”
Fasano suggested, for example, the legislature not approve the pending UConn labor contract which was sent to the General Assembly for a vote this week.
