STATE OF CONNECTICUT
THE STATE COMPTROLLER
WYMAN SAYS REVENUE TRENDS INDICATE DEFICIT LIKELY FOR 2010
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today said a preliminary analysis of the recently-enacted 2010 state budget indicates that the state will face a deficit of at least $500 million if current trends continue.
Weak collection of the payroll income tax driven by accelerating job losses is on track to offset an expected bump in revenue from the hike in the income tax rate for upper-income residents, Wyman said. Receipts of the income tax through the third week of September were down nearly 15 percent when compared to last year, and collection of the sales tax was off by 10 percent.
The income and sales taxes contribute about three quarters of non-federal General Fund revenues that make up the $18.6 billion budget for 2010.
"If first quarter trends continue, even after fully incorporating the projected revenue gains enacted as part of the budget, the revenue shortfall in the General Fund would exceed half a billion dollars," Wyman wrote in her monthly report to the Governor. "Because it is early in the fiscal year, there is sufficient time for a reversal in the trend to mitigate the shortfall."
About 70,000 payroll jobs were lost between August 2008 and August 2009, the state's unemployment rate is at 8.1 percent, and most economists are not projecting a quick recovery in employment.
Wyman said she is also concerned that $473 million in expected state agency savings built into the 2010 budget might be overly ambitious because the budget does not specify how those savings are to be achieved.
"The policy changes required to produce that level of savings are, for the most part, not addressed," in the budget, Wyman said.
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For Immediate Release
October 1, 2009
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