Gov. M. Jodi Rell’s budget office revised its 2009 budget numbers down about $22 million Friday afternoon. However, they still paint a much more optimistic picture of Connecticut’s future than figures released by either the legislature’s budget office or the state Comptroller’s office.
The Office of Policy and Management is estimating the current year’s shortfall at about $944 million, while the legislature’s budget office puts the deficit at $1.3 billion and the state Comptroller’s office predicts $1.1 billion.
On Thursday, Rell presented the legislature with her third budget mitigation plan, which uses the comptroller’s $1.1 billion deficit estimate. This plan uses about $383.8 million in federal stimulus money and $281.7 million of the state’s $1.4 billion Rainy Day fund to plug the bulk of the deficit. The Democratic majority have yet to propose its own mitigation plan, but said they would be prepared to offer details before the vote next Wednesday.
In a letter to the comptroller, the Office of Policy and Management said it based its revised $944 million deficit number on a $73 million drop in tax collections. The sales tax revenue is down by $54 million and real estate conveyance tax revenue is down $19.1 million, but those numbers were partially offset by the $40 million in Medicaid revenue the state expects to receive from the federal government.
The decline in sales and real estate conveyance taxes have implications for the next two budget years, a press release from the governor’s office says. At current rates, the decline would likely reduce state revenue by about $150 million over the two-year period, which would increase the budget gaps in 2010 and 2011.
In an emailed statement, Sen. President Donald Williams said this “new forecast for the current year deficit provides another opportunity for Gov. Rell to update her deficit projections for the FY 2010 and FY 2011 budget, something she has not done since November.”
“I remain hopeful that Gov. Rell will quickly revise her deficit projections for the biennial budget and that we can work together to help Connecticut through this difficult time,” Williams said.
Click here to download OPM’s letter to the state comptroller.