Gov. M. Jodi Rell’s administration now stands alone in projecting Connecticut’s finances to be in balance after Comptroller Nancy Wyman reported an $18 million deficit for the current year early Monday afternoon.
The comptroller, who will be sworn in as lieutenant governor on Jan. 5, certified a less severe shortfall than the $83 million deficit reported two weeks ago by the legislature’s nonpartisan Office of Fiscal Analysis, but it does reflect OFA’s concerns about a sharp increase in unclaimed property refunds.
The $18 million projection falls well below the statutory threshold that would require the governor to submit a deficit-mitigation plan to the legislature. That step is mandated when the comptroller certifies a deficit in excess of 1 percent of the General Fund. Under the current, $19.01 billion budget, that would mean a deficit beyond $177 million.
“The number of people filing for unclaimed property refunds has exploded and the payouts are far exceeding projections,” Wyman said. In recent years the state typically has paid out $25 million to $30 million annually in refunds involving property that had temporarily reverted to the state. This typically includes closed bank accounts, unclaimed tax refunds and other financial holdings later reclaimed by residents.
But in the first five months of the current fiscal year, $25 million already has been refunded, according to the comptroller.
Legislative analysts, who projected a much larger deficit, are assuming property refunds will reach $56 million before the fiscal year ends on June 30.
OFA also assumed that state agencies would fall more than $50 million short in reaching several of their projected savings targets.
The governor’s budget office, which made more optimistic assumptions about both property refunds and savings targets, projected a $300,000 surplus in its last monthly budget analysis issued on Nov. 20. The administration did not have any immediate response to Wyman’s report.