Connecticut’s projected deficit has grown tenfold in a matter of days. The General Assembly’s non-partisan Office of Fiscal Analysis (OFA) is out with a projected $72.2 million deficit for the current fiscal year.
That comes a scant four days after Office of Policy and Management (OPM) Secretary Ben Barnes reported a projected $7.1 million deficit.
OFA said in its report this reflects an increase of $65.1 million in the projected deficit of $7 million since deficit-mitigation actions were taken during the December special session. OFA said the increase is attributable to net increases of $38.3 million in expenditures and a decline of $26.8 million in revenues since December.
Since December, OFA said it has adjusted its expenditure estimates as follows:
- Based on the Gov. Dannel P. Malloy’s actions to date, $46.5 million of savings from deficit mitigation have not been identified or allocated to state agency accounts;
- Increased its anticipated deficiency requirements for state agencies by $14 million (primarily for adjudicated claims); and,
- Increased its estimated state agency lapses (i.e., savings) by $22.2 million to recognize anticipated savings in various accounts, which are not directly attributable to deficit-mitigation actions taken in December.
Major revenue changes have come in various areas. The personal income tax projection was reduced by $75 million or 0.8 percent from OFA’s last projection to reflect weaker than anticipated growth in fourth quarter payments due Jan. 15. Federal grant projections were also reduced by $46 million due to deferrals and timing of claims.
However, corporate tax revenue projections increased $50 million to reflect anticipated one-time corporate revenue. Inheritance and estate revenues were also projected to grow $24 million. Increased lottery revenues were also expected to generate an additional $9 million.
