Connecticut’s budget director is projecting a $5.7 million shortfall for fiscal year 2017, stabilized by a $120 million state settlement with Royal Bank of Scotland (RBS).
Benjamin Barnes, secretary of the state Office of Policy & Management, released his latest letter to Comptroller Kevin Lembo this week, detailing the adjustments as compared with a September forecast of a $200,000 balance. The shortfall remains “minor,” Barnes writes, in part because estimates only reflect information through the first quarter of this fiscal year.
While expenditures are expected to be $9.3 million greater than budgeted, revenues are also coming in $3.4 million higher, Barnes said.
Of the major changes, the Health Provider Tax has been revised upward by $21.2 million while the personal income and sales and use taxes have been revised downward by $53 million and $44.8 million respectively, with all other revenue sources remaining unchanged.
But what’s left out of the forecast to date is as important as what’s in it, Barnes said.
Only $80 million of the $120 million RBS settlement is reflected in current estimates because $40 million is anticipated from other settlements this fiscal year, Barnes wrote.
And Barnes has held off on reflecting the upward trend above budgeted targets for the personal income and corporation taxes, in order to confirm whether the increases are “durable,” he wrote.
A consensus revenue forecast to be completed with the legislature’s Office of Fiscal Analysis, due Nov. 10, will have more up-to-date information.
