Nonpartisan Fiscal Office: State $206M in Deficit for Fiscal Year Ending in SeptemberJanuary 29, 2018
The fiscal year (FY) 2018 picture is getting uglier and uglier for the state. It will force the legislature or the governor to make difficult decisions in this year's legislative session.
The budget that passed both chambers of the Connecticut legislature in 2017 projected a $49.2 million surplus in fiscal year (FY) 2018, which runs from October 1, 2017 through September 30, 2018.
Fast-forward to January 2018, and that budget is now $206.1 million in deficit.
The $255.3-million swing is due to declining revenues, the nonpartisan Office of Fiscal Analysis reported on Thursday.
Federal Grants revenue is below budget by approximately $198.5 million. Major contributing factors include net appropriating Medicaid rate increases for hospitals which removed $48.6 million from the revenue schedule, and lower than anticipated FY 17 finalization awards, which reduced the FY 18 estimate by approximately $50 million.
…Weakness in collections trends through December have resulted in a cumulative decrease of $136.8 million in estimated revenues, including major downward adjustments in Sales and Withholding taxes ($69.6 million and $34.1 million, respectively).
That’s $206.1 million more the state legislature, and/or the governor’s office, will have to come up with in current-year changes to either spending or tax collections.
It all makes for another difficult budget year in Connecticut, which now experiences regular deficits due to declining revenues and ever-rising long-term costs and obligations.
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