In the first four months of the fiscal year, Connecticut’s deficit is up to $60.1 million, according to the Office of Policy and Management.
A letter published by CT News Junkie from Ben Barnes, secretary of the Office of Policy, stated corporate taxes are down $15 million. Casino revenues are also off by $25 million.
At the start of October, the budget deficit was projected at less than half the current deficit. Comptroller Kevin Lembo forecast $26.9 million deficit for the fiscal year, citing a decline in sales tax and casino revenues.
“The slow national economic recovery continues to influence Connecticut’s state budget in Fiscal Year 2013,” Lembo said in a written statement. “Despite weak sales tax revenues, the state could still reach its revenue targets due to a positive income tax trend and other factors. Our deficit projection is driven by the spending side, where the rising Medicaid caseload continues to grow and will likely run $100 million over budget.”
Connecticut ended the previous fiscal year $143.6 million in the red. The deficit was paid off by using money in reserves.
If the state needs more revenue, expect the Democrats in the state legislature to find ways of increasing revenues by increasing taxes again in 2013. If the state has less money, the cash strapped towns will need to increase property taxes and motor vehicle taxes to add tax revenues lost from the state of Connecticut. New London County has 38,995 residents over 65 and they expect that number to double soon. DOL states that statewide, the unemployment rate crept upward from 7.7 percent up to 7.8 percent. Indicators such as CPI and spending show a dismal outlook. What is a more telling trend is for the following: High unemployment rate for older workers. People working multiple part time or full time jobs to make ends meet. College graduates unable to find a job in southeastern Connecticut. No large businesses or companies moving to Norwich New London county Loss of high paying jobs. People who are underemployed. The Day is reporting demolition of 1,000,000 sq ft of buildings at Pfizer; loss of $2.2 million dollars in taxes to the town of Groton. Another state budget deficit for 2013 will force State Treasurer Kevin Lembo to tell Dan Malloy we need more revenue in the form of tax increases.