Connecticut Budget Deficit: $500 Million and Counting

Connecticut is expected to run government budget deficits the next two fiscal years totaling about $500 million, according to the state legislature’s Office of Fiscal Analysis and the Office of Policy and Management.

At issue is a significant drop in revenue generated from the state’s personal income tax, reports the website CT News Junkie.

“The projections released [late last week] only further underscore how perilous our state’s finances are,” Republican House Minority Leader Themis Klarides told CT News Junkie. “Without long-term adjustments to spending, Connecticut will continue to lose population.”

In the fall, state officials worked feverishly to try to close what was projected at that time to be a $330 million hole in the budget, including proposals to close courthouses and a state police barracks, and make deep cuts to education, social services, municipal aid and other programs and initiatives.

Before the fall, officials had estimated the state would generate about $9.83 billion in income tax revenue, but that number has now been lowered to $9.57 billion. Additionally, the state’s sales tax revenue also has been lowered to $4.23 billion, down from $4.36 billion.

The situation paints a grim picture for the state’s short-term and long-term future, particularly coming on the heels of General Electric’s decision to move its corporate headquarters from Fairfield to Boston.

Further tax increases are not the answer, argues CNBC pundit Larry Kudlow, a Redding resident and former economic official during the Reagan Administration.

Gov. Dannel P. Malloy is expected to present his plans to close to the deficit next month when he presents an adjusted state budget, according to reports.

Click here to read the full story on the CT News Junkie website.