The legislature’s Office of Fiscal Analysis and the governor’s Office of Policy and Management agreed Tuesday that revenue is running $218 million shy of estimates, a number that doubles in 2017.
The budget approved in June assumed the state would bring in around $18.16 billion in revenue, but it brought in $17.94 billion, according to budget analysts.
Office of Policy and Management Secretary Ben Barnes said the 2016 revenue estimates are in line with what they predicted last month.
“I don’t think there’s any significant disagreement about where we are today, as opposed to where we were two or three weeks ago,” Barnes said.
In other words, budget analysts predicted revenue would be lower than they estimated in June when the budget was approved.
But it’s not this year’s budget that is causing concern.
The impact of the loss of revenue going forward is a “challenge we’ll have to deal with,” Barnes said.
In 2017, the revenue loss almost doubles to $402 million. That’s on top of the $246 million shortfall identified in the 2016 budget by the Office of Fiscal Analysis.
After an unrelated Capitol press briefing, Barnes said that puts in context the need to mitigate the budget shortfall now in a special session, before the budget adjustment session, which starts in February 2016.
“Maybe things get better in January and we add some stuff back, but I think this sets the stage for what the budget discussions will look like for next year,” Barnes added.
House Minority Leader Themis Klarides said the numbers highlight the urgency of the situation.
“These numbers give further proof that the state’s fiscal health has continued to erode and that significant changes are warranted to address the ever increasing deficit we face,” Klarides said in a statement. “The budget was out of balance when it was passed and revenues will only continue to fall short of expenses.”
She said they need to make the “right spending cuts now.’’
Tuesday’s revenue report showed that income tax revenue was lower than expected, sales tax was close to what was estimated in June, and the inheritance and estate tax was up slightly.
Lawmakers and Gov. Dannel P. Malloy will meet again Thursday to discuss their proposals to cut spending between $350 to $370 million. It will be their third meeting since Malloy used his executive authority to cut $103 million from the 2016 state budget.