Despite the need for revenue to make up for a recent steep decline in tax receipts, Gov. Dannel P. Malloy and the legislature’s top Democrats said Friday they would repeal the launch of Keno.
An earlier version of the state budget called for Keno to generate $27 million in revenue in fiscal year 2015, which begins July 1.
It wouldn’t have been nearly enough to cover a 2015 budget hole that Benjamin Barnes, Malloy’s budget director, said Friday was approximately $280 million.
Nearing the end of the legislative session next week, legislators have been grappling with recent news that tax receipts are coming in much lower than expected, wiping out more than $461 million of a previously projected $505 million surplus. The remaining surplus would be deposited into the state’s rainy day fund, bringing its balance to $314.1 million.
To cover that $280 million hole, Democrats, which control the House and Senate, said Friday that they negotiated a budget deal that would postpone a proposed sales tax exemption on non-prescription drugs and certain clothing and footwear items. In addition, a proposed plan to eliminate a portion of the tax on retired teachers’ pensions will now be phased in over three years, Barnes said.
The budget details come after Barnes announced early last week that his proposed $55 tax rebate, as well as a planned $100 million deposit to the state’s pension fund, would have to be cancelled.
