The nonpartisan Office of Fiscal Analysis (OFA) of the Connecticut General Assembly is forecasting a $138.6 million deficit for the fiscal year ending June 30 and a $2.5 billion deficit for the 2014 and 2015 fiscal years.
The General Assembly convened last month in Hartford to begin working toward its biennial budget for the 2014 and 2015 fiscal years. The projected $2.5 billion shortfall represents a 15 percent increase from a November 2012 estimate by OFA that predicted the 2014-15 deficit at $2.16 billion.
Separately, state Comptroller Kevin Lembo wrote in a Feb. 1 letter to Gov. Dannel P. Malloy that the state government is facing a $140 million deficit for the remaining five months of its 2013 fiscal year.
“The slow growth in the national economy has created increasing demand for state services while at the same time producing lower revenue collections,” Lembo said in a Feb. 1 statement. “Traditionally, even after the national economy improves, there is a lag before the state budget realizes the full benefit of the general economic improvement.”
However, Lembo said there is an opportunity for gains later this spring.
“April is a significant month for income tax collections,” he said. “Recent federal tax changes combined with favorable market performance could result in a shift of capital gains revenue from future years to the current budget year. This would improve the budget forecast, so we will continue to modify our projections based on actual experience.”