The state’s deficit for the fiscal year that ends next week has narrowed nearly 30 percent over the past month, thanks largely to higher than expected tax revenue from corporations, insurers and hospitals, according to calculations by the Office of Policy Management.
The 2015 fiscal year deficit stands at $115.7 million, down by $49.2 million from a month ago, OPM Secretary Benjamin Barnes wrote in a letter Friday to Comptroller Kevin Lembo.
The state’s rainy day fund will cover any remaining deficit for the fiscal year, Barnes said.
Revenue from the corporation tax, escheats from the insurance industry and the hospital tax, as well as fewer tax refunds than expected, added a combined $100 million to the general fund over the past month, Barnes said.
But lower than expected income from the personal income tax and other taxes reduced that increase by about half.
OPM is one of several state agencies that estimates the state’s ongoing fiscal picture. OPM’s projections turned negative in October and have been there ever since. Last month’s $164.9 million estimate was OPM’s highest projected deficit of the year.
That was despite three rounds of mid-year cuts between November and April that totaled more than $99 million. Of that amount, $56.9 million actually reduced the deficit, according to the Office of Fiscal Analysis.
OPM’s reduced projection last week assumes the impacts of fund transfers and appropriations in the recently negotiated budget for fiscal years 2016 and 2017 that has yet to be signed into law.
Lembo’s office on June 1 concurred with the $164.9 million estimate, while in late May the nonpartisan Office of Fiscal Analysis projected a higher deficit of $189.5 million.
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