State Comptroller Kevin Lembo certified that Connecticut would end the year with a nearly $200 million budget deficit, requiring Gov. Dannel P. Malloy to issue a deficit mitigation plan to the General Assembly.
“Slower than anticipated April income tax receipts and higher tax refunds combined with growth in net state spending explain the large change in the forecast this month,” Lembo wrote Gov. Dannel P. Malloy in his monthly letter.
Lembo said general fund revenue is expected to fall $243 million short of projections and total state spending is expected to exceed appropriated levels by $37.4 million.
“This deficit number confirms that Connecticut did not experience the short-term growth anticipated — but there are some positive economic indicators pointing forward,” Lembo said.
The Department of Labor continues to report that Connecticut’s unemployment rate continues to decline and federal labor statistics show personal income is slowly growing in the state. However, it wasn’t fast enough to save the state from having to deal with another deficit less than one year after the largest income tax increase in the state’s history.
“Slower than anticipated economic growth results in depressed revenue collections and accelerating demand for state services. Unfortunately, economic growth is not yet at normal recovery levels,” Lembo said.