Storms cause problems for state’s budget forecast
Though it may not gather the same headlines as power outages and closed roads, you can add the state budget to the list of programs and services disrupted twice in the last two months by Connecticut’s disastrous weather.
Specifically, this past weekend’s Nor’easter will mean Gov. Dannel P. Malloy’s administration will now wait until late November or early December to learn how one of its most vital sources of revenue is performing this fiscal year.
The Department of Revenue Services announced Monday afternoon that it would extend the deadline for quarterly income tax filings — as well as certain other tax reports — from Oct. 30 to Nov. 15., because of the statewide disruption caused by the unseasonably early snowstorm.
While many self-employed individuals make quarterly income tax payments, those reports also are the chief means of reporting capital gains, dividends and other major investment earnings. Earnings from these reports represent nearly 40 percent of nearly $8.5 billion in income tax revenues projected for this fiscal year.
And those quarterly income tax filings already have been pushed back once. Originally due on Sept. 15, the deadline was extended to Oct. 30 to help households disrupted by Tropical Storm Irene.
Irene, which hit Aug. 27-28, left over 765,000 households without power, and full service wasn’t restored until 9 days after the storm. The latest storm dumped as much as two feet of snow on portions of Connecticut on Saturday and Sunday and left a projected 884,000 households without electricity over the weekend, prompting utility officials to warn the restoration period could exceed that of Irene.
“Given the unprecedented extent of this storm, especially the power outages affecting homes and businesses across the state, this extension is only fair,” Department of Revenue Services Commissioner Kevin B. Sullivan said Monday.
“We think we’re going to have more uncertainty than we would like, but we’re going to do our best,” Malloy’s budget director, Office of Policy and Management Secretary Benjamin Barnes, said Monday.
Both OPM and the legislature’s nonpartisan Office of Fiscal Analysis have a major fiscal projection due to the General Assembly on Nov. 15 in accordance with the state’s fiscal accountability act.
That report, which must project revenue and spending trends for both the current year and the next four, will be formally presented to the Appropriations and Finance, Revenue & Bonding committees at a joint meeting on Nov. 29.
Barnes said that most electronic filers submitted their quarterly income tax reports by Friday — when the deadline was still Oct. 30. Although any other electronic filings — as well as paper reports submitted by mail — won’t be available for analysis for at least two more weeks, he added he’s hopeful enough data will be on hand to give lawmakers a preliminary briefing on income tax revenue trends.
The administration announced on Oct. 20 that it is watching some negative fiscal trends that could threaten the modest, $75.6 million surplus currently projected for this year.
A significant shortfall is possible in the health service programs both for retired and current workers, due in part to higher than anticipated enrollment in the new wellness program established in the union concession deal.
OPM assumes no additional state resources will be needed to meet the benefits ordered by the state legislature for Connecticut’s winter heating assistance program, which relies primarily on federal aid. But Congress hasn’t resolved funding for the Low Income Home Energy Assistance Program to date, and Connecticut could face problems if federal lawmakers allocate less than the U.S. House and Senate appropriations committees have recommended.
The state also may need to adjust this year’s contribution to the state employee pension fund up or down, in the next few months. The administration and legislature built savings in this area into the budget based upon new pension restrictions in the concession deal and the amount of money they are expected to save over the next 30 years. But the state’s actual required pension contribution for this year won’t be known until a private actuarial analysis is completed later this year.
The latest tax filing extension also covers reports involving income tax withholding from paychecks, as well as sales, admissions, alcohol and estate taxes.
Further information about tax deadline extensions can be found on the DRS website at www.ct.gov/DRS or by calling 860-297-5962 locally or 1-800-382-9463 from outside of the Greater Hartford area.
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