Surging tax receipts dramatically shrink hole in next Connecticut budget

From CT Mirror.

State tax revenue projections surged again Tuesday, shrinking the projected shortfall in the upcoming two-year budget — and leaving Connecticut with nearly $2.1 billion in reserves to combat the deficit.

Gov. Dannel P. Malloy’s budget staff and the legislature’s nonpartisan Office of Fiscal Analysis upgraded revenue projections for the upcoming biennium by $880 million.

The latest consensus revenue report also found tax receipts for the current fiscal year should approach $16 billion — $87 million more than anticipated.

Even with Tuesday’s good news, Connecticut’s red ink still exceeds its reserves and any potential additions by a little more than $1.4 billion over the two-year cycle — or about $700 million per year or nearly 4 percent of the General Fund.

And it still remains unclear whether Governor-elect Ned Lamont and the 2019 General Assembly will choose to tap all of those reserves to close the remaining shortfall.

“These new consensus revenue estimates reflect the strong recent growth we have seen in our economy and demonstrate that policy changes … are working and helping taxpayers,” Office of Policy and Management Secretary Ben Barnes, Malloy’s budget director, said Tuesday. “Governor-elect Lamont and the next General Assembly will have a difficult task ahead in balancing the budget and keeping it under the spending cap, but the economic performance we are experiencing has made the task more manageable.”

Income tax receipts, which frequently have fallen short of state officials’ expectations since the last recession, have been doing the opposite over the past 12 months.

See the complete article from CT Mirror online.