CT Comptroller Lembo projects $31.6M budget deficit for FY 2020

Connecticut Comptroller Kevin Lembo has issued an updated forecast for a $31.6 million budget deficit in fiscal year 2020.

In a letter to Gov. Ned Lamont, Lembo said his updated forecast was based on the projected revenue reduction of $84.5 million by the state Office of Policy and Management and the Office of Fiscal Analysis coupled with a $24 million net deficit projected in the fringe benefit accounts, which he mostly attributed to fewer than anticipated retirements.

Lembo also noted his adjusted forecast encompasses a $100 million increase in tax refunds, mostly the result of larger than expected refunds for the income tax and pass-through entity tax, plus a $20.7 million reduction in revenue related to the new plastic bag surcharge.

Lembo noted that if current projections are realized, a $318.3 million volatility transfer would be made to the budget reserve fund ”“ more commonly known as the “rainy day fund” ”“ at the close of the fiscal year. The fund balance is now at $2.5 billion.

“In order to help protect against future economic downturns, Connecticut must maintain financial discipline and continue building the BRF balance to the statutory target of 15 percent,” Lembo said. “Connecticut”™s budget results are ultimately dependent upon the performance of the national and state economies.”