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Projected FY2018 Deficit Booms, From $163 Million to $384 Million

May 1, 2018 By Staff
Projected FY2018 Deficit Booms, From $163 Million to $384 Million

The hole that the Connecticut legislature and the governor need to get out of in this fiscal year just got deeper.

The nonpartisan Office of Fiscal Analysis (OFA) just released its latest projection for the state’s fiscal year (FY) 2018 budget deficit, and it’s up more than $200 million from their estimate just last month.

OFA reported:

We are projecting an FY 18 deficit of $384.6 million once the transfer (volatility adjustment) of $1,290 million from the General Fund to the Budget Reserve Fund is taken into account.

Last month, OFA projected a $163 million deficit. That means the projected deficit has more than doubled in the course of a month.

There’s some good news in OFA’s projections. OFA’s consensus revenue estimate, with Office of Policy and Management (OPM) Secretary Ben Barnes, found the state is expected to bring in $16.7 billion in tax revenue in FY 2018, up $1.7 billion from the $15.0 billion OFA and OPM projected for tax revenue this time last year.

But most of that windfall ($1.3 billion) goes to the state’s BRF, or Budget Reserve Fund (“also known as the Rainy Day Fund,” according to the comptroller’s office).

Reclaim Connecticut noted in April that some Connecticut Democrats want to spend part of the tax windfall.

The fiscal year ends September 30, 2018. The legislature will need to tackle the deficit in a special session if they don’t pass a balanced budget (that the governor signs) by the end of the legislative session in mid-May.