Gov. Dannel P. Malloy has been touting for months that Connecticut faired better than neighboring states because it took a comprehensive approach to balancing the budget, but despite the largest tax increase in the state’s history consensus revenue estimates show it teetering on the precipice of a deficit.

The numbers agreed to by Malloy’s Office of Policy and Management and the legislature’s Office of Fiscal Analysis Tuesday show revenues dropping $94.9 million in fiscal year 2012 and $139 million in fiscal year 2013.

Those drops come despite the $1.5 billion in tax increases and the $369 million surplus built into this year’s budget and the $635 million built into next year’s budget.

This year’s $20.14 billion budget was projected to finish with a surplus of $83 million earlier this month, but lower than expected income tax and capital gain receipts is pushing it into the red.

The Office of Policy and Management speculated that the most likely explanation is that “this is a result of taxpayers shifting capital gains and income as a result uncertainty at the federal level, specifically the uncertainty surrounding the extension of the Bush-Era tax cuts.”

It opined declines in financial service industry bonus levels could also be a contributing factor.

Regardless of where the deficit is coming from, Malloy promised he’s going to make sure the budget ends the year in the black.

“All today’s announcement means is that, as is the case in other states with high wage earners, fourth quarter revenue is coming up short of expectations,“ Malloy said in a press release. “That’s why today, I’ve instructed Secretary Barnes to pare back on current year expenses. But let there be no confusion – we will end the current fiscal year in the black, and in a more stable fashion than this state has seen in many years.”

But Republican lawmakers, who grumbled when Malloy proposed his budget with a built-in surplus, were saying today’s report is just more evidence that relying on tax increases to balance the budget doesn’t work.

“This is more proof that Governor Malloy’s over reliance on tax increases was a failed approach to balancing the state budget in a responsible way,“ Sen. Minority Leader John McKinney, R-Fairfield, said. “When the largest tax increase in state history isn’t enough to pay the bills, I hope everyone can agree that a significant reduction in the size and cost of government is in order.”

House Minority Leader Lawrence Cafero, R-Norwalk, said the recent report is troubling.

“We just had the largest tax increase in history, primarily on the middle class, and Connecticut is still struggling,” Cafero said. “The deal the governor stuck with the unions really ties our hands and we still have not seen any savings on the spending side.”

He said the legislature will have to make budget adjustments for the second year of the two-year budget in order to bring spending into line with revenues.

Office of Policy and Management Secretary Ben Barnes is expected to give Malloy a plan next week that uses the governor’s recessionary authority to make sure the budget stays in balance through the rest of the year. Malloy also asked Barnes in this letter Tuesday to make sure the plan complies with his desire to implement generally accepted accounting principles.

As the budget, which Malloy says was free of gimmicks, begins to fall apart, so does his ability to use surplus funds to implement his number campaign promise: GAAP.

In order to cover the deficit which will emerge when the state converts its accounting practices from a general cash basis to GAAP, Malloy and the legislature agreed to dedicate $75 million in surplus funds this year to begin paying off the differential.

Barnes argues the budget doesn’t delay conversion to GAAP. It just creates a 15-year plan to eliminate the accumulated GAAP deficit of $1.5 billion and starts amortizing the cumulative unfunded GAAP liability before 2014.

In order to get started on the conversion Malloy and the legislature agreed to use $75 million in surplus funds this year and $50 million next year to cover the growth in the differential.

Republican lawmakers have long argued that Malloy used GAAP as his “cause celeb” on the campaign trail and once he took office postponed the transition until the next biennium after being handed a $3.5 billion deficit his first year in office.