Comptroller Kevin Lembo Thursday projected a fiscal 2017 deficit of $82.3 million, but noted the largest potential offset from tax collections are due in the next two months.
“By the third week in January, a more reliable trend for this tax component will be apparent,” Lembo said. “In addition, the payroll-driven withholding component of the income tax historically experiences its strongest receipts between December and March.”
Lembo acknowledged in his letter to Gov. Dannel P. Malloy that the latest projection from his office is $14.6 million higher than the projection from the state Office of Policy & Management. That is because of expected higher spending to adjudicate claims in the SEBAC v. Rowland case.
Other factors that could affect the size of the deficit are continued budget management steps to eliminate the shortfall, he said.
Lembo projected that net spending will be $59.1 million over budget and, as he has noted in previous months, OPM is relying on a savings target of $203.3 million that is not historically high, but follows successive years of cost cutting, which could make it difficult to achieve.
“To realize no growth in actual year-over-year outlays is a considerable management challenge that will require the skillful efforts of all agencies and branches of government,” Lembo said.
Among more recent positive economic developments, Lembo said that despite deterioration in the Connecticut job market over the past several months, the household census survey used to calculate the unemployment rate has been pointing to job gains.
