State Comptroller Nancy Wyman estimated Monday that the state’s projected budget deficit has more than tripled in the past month to $338 million. And it’s showing no signs of slowing.
Wyman’s estimate—which is about $50 million higher than the one made by the Governor’s budget office—includes the $71.8 million mitigation plan the General Assembly passed last week.
In a press release issued by Wyman’s office Monday she said because the deficit now exceeds one percent of the total General Fund balance the Governor will be required to submit a new mitigation plan to the General Assembly within the next 30 days.
“I anticipate that as deteriorating economic conditions are further reflected within actual revenue collections, my deficit estimate will rise,” Wyman wrote in her monthly report to the Governor.
Wyman said she expects the income tax to bring in about $131 million less than originally budgeted, while the sales tax is projected to drop by about $207 million.
Payroll withholding income tax receipts are down 2.8 percent from a year ago and the state’s unemployment rate is at a 15-year high at 6.5 percent, Wyman said in a press release.
Advance retail sales are down 4.1 percent from last year and corporate profits continue to show negative results and existing home sales are at a 12-year low in the state, she added.
Wyman again called on the Governor and the legislature to address not only the current revenue shortfall, but an additional $500 million “structural deficit” that has been created by using prior years’ surplus funds to pay for current expenses.
If no plan is created to deal with the overall deficit by the end of the fiscal year June 30, she said, state law requires that any deficit be automatically covered by the state’s Rainy Day Fund, which now stands at about $1.4 billion.