State faces a more than $115 million deficit for 2015 fiscal yea - WFSB 3 Connecticut

State faces a more than $115 million deficit for 2015 fiscal year

Posted: Updated:
(WFSB photo) (WFSB photo)
HARTFORD, CT (WFSB) -

The state's comptroller announced that Connecticut faces a final deficit of more than $115 million for the 2015 fiscal year.

While fiscal year 2016 began on Wednesday, comptroller Kevin Lembo said the official deficit number for 2015 will be determined later this year.

Lembo told Gov. Dannel Malloy in a letter that he is in general agreement with the Office of Policy and Management, which estimated the deficit to decrease by $49.2 million over last month's projection.

“These projections will undoubtedly undergo further adjustment as accounting corrections continue to be posted after June 30 and revenue and expenditure accruals are processed,” Lembo said. “Any remaining General Fund deficit for Fiscal Year 2015 will be eliminated through a transfer from the Budget Reserve Fund.”

Lembo said the decrease is due to improving revenue. The corporation tax estimate was increased by $44 million.

“This tax category had been expected to record a decline in revenue from last fiscal year due to expanded tax credits; however, the corporation tax is now expected to show a slight gain over last fiscal year,” Lembo said.

He also reported that the projection for escheated property is also up by $36 million this month. However, the gains were offset by a $35 million decrease to the income tax as a result of lower-than-anticipated June receipts.

In total, Lembo said the general fund revenue is expected to fall $141.7 million short of the original budget plan.

“While some revenue categories have exceeded expectations – such as the corporations tax – overall economic growth has remained relatively stagnant,” Lembo said. “The recovery from the last recession has been slower and more gradual than we need, and unlike any other we’ve experienced.”

Copyright 2015 WFSB (Meredith Corporation). All rights reserved.