Connecticut Resources

Surging tax receipts take a huge chunk out of state’s projected budget deficit

From CT Mirror.

Connecticut got a shot of good fiscal news Tuesday as surging tax receipts helped to lop nearly 40% off the state’s projected $2 billion deficit, increasing the likelihood Gov. Ned Lamont can avert major tax hikes next spring.

The surging revenues also give lawmakers more money to assist public universities and others hurt financially by the pandemic.

“Despite the COVID pandemic, the U.S. stock market is 14.0% higher than a year ago,” Office of Policy and Management Secretary Melissa McCaw, Lamont’s budget director, wrote in her monthly forecast to state Comptroller Kevin P. Lembo. “In addition, pandemic-related closures of many businesses may have caused deferred consumption of goods and services, resulting in pent-up demand that is now being realized.”

The administration now projects a deficit of just under $1.3 billion, which still represents more than 6% of the budget’s General Fund, which covers most operating expenses.

Most of that improvement, about $454 million, is tied to enhanced revenue projections.

Administration officials have upgraded expectations for state income and sales tax receipts by $260 million and $91 million, respectively. Business tax collections are up another $80 million and projected real estate conveyance tax receipts increased by $45 million.

See the complete article from CT Mirror online.