While lawmakers and Gov. Dannel P. Malloy work on the $2.2 billion deficit over the next two years, things are beginning to look better for this year’s budget.
According to Office of Policy and Management Secretary Ben Barnes the state will end the year with $2.8 million surplus. That’s an improvement of more than $36.4 million over last month’s projections.
But that’s before April tax collection revenues have been calculated.
Barnes is estimating that revenues are up $52.3 million over last month. Most of that is due to the Inheritance Tax being revised upward by $90 million due to larger than normal collections. The sales tax has been revised downward by $15 million and continues to underperform.
“It should be noted that April is the most important month for Income Tax collections, and those receipts are still being tallied by the Department of Revenue Services,” Barnes wrote in his monthly letter to State Comptroller Kevin Lembo. “It would therefore be premature to modify our forecast for that revenue source at this time.”
On the spending side the $306 million in deficiencies are more than offset by the amount of money the administration has asked state agencies not to spend.
The most significant deficiency is the $247 million deficiency in the Department of Social Services’ Medicaid account, which is an improvement of $8 million over last month.
Lembo is expected to release his next monthly forecast on May 1.
On April 1, Lembo expressed optimism that the state would end the year in the black after months of deficits.
Even though Lembo predicted a $91.3 million deficit earlier this month, his projections were closer to Barnes’ than they have been over the past year. Last month Barnes projected the state would end the year with a $33.6 million deficit, a $57.7 million difference. The two have been further apart over the past fiscal year, but have gotten closer as the end of the year draws closer.
The legislature’s nonpartisan Office of Fiscal Analysis and the Office of Policy and Management are expected to release their revenue estimates later this month.