HARTFORD, CT — The tax receipts from April 15th have been counted and Connecticut is poised to end the fiscal year with a $581 million operating surplus. That’s on top of the $885.5 million that will automatically be deposited into the Rainy Day Fund as a result of the volatility cap.
That brings Connecticut’s Rainy Day Fund up to $2.65 billion.
At the same time the state is still on track to end next year with a $1.5 billion deficit and the following year with a $2 billion deficit. That $3.5 billion budget deficit is what lawmakers and Gov. Ned Lamont are looking to resolve with their budget proposals.
Later Wednesday, lawmakers will put forward their tax package and the negotiations with the Lamont administration will begin in earnest.
Republicans, who lost seats in the last election, said the positive numbers reflect the bipartisan budget that didn’t seek to increase taxes.
Republican Senate Leader Len Fasano, R-North Haven, warned that while the revenue figures were promising “lawmakers should not use these positive signs of growth as an excuse to return to the same devastating tax and spend strategies that have hurt Connecticut before.”
He said the “unbalanced budget offered by Gov. Lamont and the shaky spending plan Democrats proposed today would move our state in the opposite direction of the progress we’ve made. Now is not the time to abandon fiscal restraint, but rather to recognize that our bipartisan budget is working. All economists have predicted a recession is on the horizon. Connecticut needs to remain cautious.”
State Comptroller Kevin Lembo, who will certify the numbers later Wednesday, said the consensus revenue figures reflect growth in the withholding portion of the income tax and limited growth from the quarterly filers. He said there was good growth in the corporation tax and the sales tax as well.
He said all that growth is real and there’s nothing in any of those tax categories that would lead him to believe there was any one-time revenue they shouldn’t budget going forward.
Lembo also said he doesn’t believe the bipartisan budget has anything to do with the revenue figures.
“I understand that it’s disappointing for them this year that they don’t have the numbers they’ve had in the past,” Lembo said. “But this is largely a sign of national and state economic growth and not so much what one bill or a suite of bills did in the last two years.”
Senate President Martin Looney, D-New Haven, said that if the Republicans want to have a conversation about the budget then they need to put forward their own.
Republicans were critical Tuesday of the spending package and are expected to be just as critical of the tax package put forward Wednesday by Democratic lawmakers.
“The only way to take into consideration Republican budget priorities is to see a fully vetted document that indicates where they seek to raise revenue or cut spending,” said Looney. “It is impossible to budget in a piecemeal fashion.”
The Republicans have not decided yet whether to put forward their own budget proposal.
Rep. Vincent Candelora, R-North Branford, said Wednesday that they’ve done that before, but it “became tiresome that we put out our own proposals and we’re accused of being obstructionist.”
He said they are willing to sit down at the table and have a conversation.