HARTFORD, Conn. –After budget analysts counted up all the revenue Wednesday, they discovered next year’s budget falls nearly $300 million short of where analysts anticipated it would be at the beginning of the year.
Budget analysts concluded that the state will end this fiscal year with a $43.3 million surplus, which is about $462 million short of the $505 million surplus it predicted in January. The fiscal year 2015 budget was based January revenue estimates which ended up being poor predictors of Connecticut’s fiscal future. That means lawmakers will be left to plug a nearly $300 million hole.
The dive in revenue numbers was related mostly to the fact that income tax revenue wasn’t as robust as predicted. Corporation taxes were revised downward by $44.2 million and sales tax projections were revised downward by $22.6 million. The Malloy administration is attributing the decline in sales taxes to “the impact of this winter’s weather and certain federal policy efforts.”
“We believe this is due to several tax law changes at the federal level at the beginning of calendar year 2013. These tax law chances made it advantageous for investors to realize capital gains in 2012, likely resulting in a significant decline in such realization in 2013,” Office of Policy and Management Secretary Ben Barnes said in a memo.
See the complete story at CT News Junkie.
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