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CT’s Two-Year Deficit Soars 30 Percent, as Malloy Announces $1.1B Shortfall

April 28, 2017 By Staff
CT’s Two-Year Deficit Soars 30 Percent, as Malloy Announces $1.1B Shortfall

The office of Gov. Dan Malloy (D-Conn.) announced on Thursday that income tax receipts are plummeting, which will lead to an expected $1.1 billion shortfall in the next two fiscal years.

Gov. Dan Malloy’s (D-Conn.) budget office announced on Thursday that Connecticut is $450 million short on income tax receipts for April, meaning the state anticipates $1.1 billion less in tax revenue for the next two fiscal years.

The CT Mirror first reported the shocking news.

Before Thursday’s announcement, the state faced a daunting budget deficit of $3.6 billion for fiscal years (FYs) 2018 (which runs from October 1, 2017 through September 30, 2018) and 2019 (which runs from October 1, 2018 through September 30, 2019).

With this announcement, though, the state’s projected deficit shot up 30 percent overnight, to an incredible $4.7 billion. According to the governor’s office, and the Mirror‘s reporting, the projected budget deficit is now $2.2 billion for FY 2018 and $2.5 billion for FY 2019.

Connecticut has a balanced budget requirement in its constitution, meaning Malloy and legislators will have to find a way to make up for that $4.7 billion, with spending cuts, tax increases, or both.

The state’s “Rainy Day Fund” is only $235.6 million, or about five percent of the projected $4.7 billion shortfall. The latest report from the governor’s office makes it clear that it’s not raining, it’s pouring.