HEADLINES : Connecticut
State Budget Deficit Projected At $192 Million
HARTFORD - Despite the largest tax increase in Connecticut history, the state is projected to finish the fiscal year with an operating deficit of $192 million, officials said.
State Comptroller Kevin Lembo, who certifies the official calculations, said the state income tax that is collected from capital gains and Wall Street bonuses increased by only 5.9 percent for the year, which is below the recovery level from past recessions. The traditional Wall Street rebound has helped vault the state into budget surpluses in the past, but that has not happened yet this time.
"The economy is the largest single influence on the state budget – dwarfing any other budget drivers," Lembo said. "Wall Street's erratic equity markets and challenges in the financial sector – which had the largest private-sector job loss in the state – is the driving force behind this deficit."
Based on a recent law passed by the Democratic-controlled legislature and signed by Democratic Gov.Dannel P. Malloy, the deficit will be covered by money saved from various general fund reserves from the past.