State’s bottom line is improving

The state”™s books for fiscal year 2015 won”™t close until late September, but its largest business organization, the Connecticut Business and Industry Association, citing state officials, said “the bottom line is looking a little better.”

According to state Comptroller Kevin Lembo and the Office of Policy and Management, Connecticut could end fiscal year 2015 with a $70.9 million deficit ”“ an improvement of $44.8 million compared with last month”™s estimate.

General Fund revenue for fiscal year 2015 is expected to fall $144.5 million below initial budget expectations, Lembo said. The largest single downward revision is in the income tax, which is projected to close the fiscal year $110.5 million short of budget expectations, he said.

The most significant revenue increase is in the corporation tax, which is expected to exceed the initial budget amount by $107.7 million, Lembo said.

“Overall tax revenue is relatively flat,” the CBIA reported, “with tax receipts higher than budgeted for corporate taxes and lower than anticipated for personal income taxes.

“The state must seriously consider and explore the many possible policy remedies ”“ because, while jobs continue to grow, so must wages,” Lembo said in a statement.

“The issue is still about spending and overspending,” said CBIA economist Pete Gioia. “The state still needs real spending reforms to address these continuous shortfall issues.”

Tax receipts through this month will continue to count toward the fiscal year 2015 balance sheet and the CBIA said that if a deficit remains, the state will use dollars from its so-called rainy day fund to close the gap. That fund is currently capped at 10 percent of the state”™s tax revenue. Lembo has petitioned the legislature it to raise it to 15 percent.

A final deficit for fiscal year 2015 will be determined later this year after the state”™s financial books are audited and closed, according to Lembo”™s office.