STATE OF CONNECTICUT
THE STATE COMPTROLLER
|COMPTROLLER WYMAN PROJECTS DEFICIT OF $624 MILLION|
|For Immediate Release||Contact: Steve Jensen|
|November 2, 2009||860-702-3308/3301|
State Comptroller Nancy Wyman today projected the state will end the 2010 fiscal year with a budget deficit of $624 million, mainly due to continued weak receipts of the income tax.
Wyman's estimate puts the deficit at $235.5 million higher than the projection of the Governor's budget office.
"Although I see a slight improvement in revenues occurring toward the end of the fiscal year, my projection takes into account the accelerating job losses, high unemployment and decline in personal income that Connecticut residents are seeing now and can expect to see in the near future," Wyman said.
The steepest drop in the income tax was in tax payments made quarterly by investors and others based on their estimated year-end income, including annual bonuses. Those payments were down 29 percent in September.
Total revenue for the year so far is down by $407.6 million. That is more than double the revenue drop that would trigger the cancellation of a planned one-half percent reduction in the sales tax that was approved by the General Assembly in its 2010 budget.
The Governor's latest estimate put the total revenue shortfall at $172.1 million, which by a margin of $1.6 million would enable the sales tax reduction to take effect in January.
"I wish I had better news about the revenues and the implications for a sales tax cut," Wyman said, "but my projection is based on actual tax collections and underlying economic trends that cannot be ignored."
Beside the revenue shortfall, deficiencies in state agency budgets added another $212.5 million to Wyman's deficit estimate.
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