(Updated) State Comptroller Nancy Wyman projected this year’s deficit at $371 million, Thursday in her monthly letter to Republican Gov. M. Jodi Rell.
The number is about $147 million below Wyman’s March 1 projections and is based on the $100 million deferral in state employee pensions and an additional $47 million in new federal Medicaid funds.
“As this is part of the stimulus program, the savings are temporary,” Wyman warned in her letter to Rell. “Neither of these current year expenditure reductions addresses the long-term structural imbalances in the state budget.”
Wyman’s $371 million deficit projection is still about $15 million lower than the estimates compiled by the Office of Policy and Management, which pegged the deficit at about $356 million more than a week ago.
“My variance from OPM is explained by my income tax projection, which is $14.5 million lower than the OPM estimate,” Wyman said in her April 1 letter to Gov. M. Jodi Rell.
“Pending final income tax payment receipts, I am projecting General Fund revenues to fall $357.4 million short of budget projections,” Wyman wrote. “The two largest shortfalls are in the income tax and sales tax categories, which are short of budget projections by $222.2 million and $90.6 million respectively.”
Wyman said the final deficit figure will be greatly determined by how much income tax revenue is collected around the April 15 filing deadline.
“The weeks around the filing deadline are always a crucial time for revenues,” Wyman said in a press release. “We normally take in about $1 billion during this time, but with the economic downturn it is very hard to predict what is going to happen this year.”
“Preliminary figures show that Connecticut’s payroll employment declined by 1,100 jobs in February,” Wyman said in her letter to Rell. “Leading economic indicators for Connecticut have posted some gradual improvement, but a return to job growth is expected to be slow in coming.”
And while Rell submitted a March 1 deficit mitigation plan to the legislature, Wyman reminded her that hardly any of it was adopted and “the current deficit triggers the requirement for a second mitigation plan.”