CT Budget Deficit Increases... Again

HARTFORD, CT — Connecticut's state budget deficit has increased yet again. Gov Dannel Malloy's budget office is predicting a $240.2 million deficit for the current fiscal year, up $17.7 million from last month.

The change is mainly due to revised revenue forecasts. Malloy presented a deficit mitigation plan to the General Assembly last month.

One bright point is that many people paid state income taxes before the start of the new year in order to take advantage of the last time to file before a $10,000 federal cap is placed on state income and property tax deductions, the governor's office said. However, this reduced budget projections for April collections, where many people make last-minute payments.

A federal law from October 2008 required hedge fund managers to bring overseas profits back to the United States by the end of 2017, which will net Connecticut $675 million.

The extra money will go toward a Budget Reserve Fund as required by new law. That means the money won't be able to be used to offset the current deficit issue, but it will help in future budgets.

Connecticut could see more fiscal woes if Congress doesn't reauthorize the Children's Health Insurance Program CHIP, which is known as HUSKY B in Connecticut. It would cost Connecticut $10 million in the current fiscal year and $40 million annually after that.

The following shortfalls are predicted in state agencies:

• $400,000 at the Division of Criminal Justice.
• $3 million at Department of Emergency Services and Public Protection due to overtime costs.
• $2.45 million for Department of Energy and Environmental Protection.
• $10 million at Department of Correction.
• $170,000 at Office of the Chief Medical Examiner.
• $12.4 million at the Department of Children and Families.
• $250,000 Public Defender Services Commission.
• $8.3 million through State Comptroller Frindge Benefits account due to increased costs for retired state employees.

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