Changes in the federal tax code and an expiring tax provision aimed at hedge fund managers has resulted in Connecticut reaping a greater than expected collection of estimated personal income taxes in December and January.
The state”™s projection for these payments in November was $3.14 billion, of which more than $2 billion has already been collected. However, under state law, $10 million of those funds can be directed to paying down Connecticut”™s $224 million budget deficit, with the rest transferred to a rainy day fund.
“We still need to take steps to close the deficit this year and to avoid one in the (fiscal) year that starts in July,” Malloy said. “If we take those steps and use these one-time revenues to rebuild our rainy day fund, we will give Connecticut residents and businesses the fiscal responsibility they have been demanding.”