State Comptroller Kevin P. Lembo reported a $140 million deficit Friday in the state’s current operating budget, a gap that falls shy of the level that would compel Gov. Dannel P. Malloy to issue a second deficit-mitigation plan.
Lembo’s new projection effectively matches the $139 million deficit reported last week by the legislature’s nonpartisan Office of Fiscal Analysis, and is more than double the $64.4 million shortfall the administration released on Jan. 20.
The comptroller’s estimate represents about three-quarters of 1 percent of the general fund and falls $51 million short of the amount that would trigger another mitigation plan.
The new deficit does exceed funding in the emergency budget reserve. Commonly known as the Rainy Day Fund, it holds $93.5 million.
Both the comptroller and legislative analysts differ with Malloy largely over the increased demand for state-sponsored health care and other social services.
Lembo also agreed with new revenue projections from both the administration and legislative analysts that showed a $34 million decline.
“The slow growth in the national economy has created increasing demand for state services while at the same time producing lower revenue collections,” Lembo said. “Traditionally, even after the national economy improves, there is a lag before the state budget realizes the full benefit of the general economic improvement.”
The comptroller did note there still is time for the current budget outlook to improve, particularly if state income tax receipts this spring begin to climb.
“April is a significant month for income tax collections,” Lembo said. “Recent federal tax changes combined with favorable market performance could result in a shift of capital gains revenue from future years to the current budget year. This would improve the budget forecast, so we will continue to modify our projections based on actual experience.”
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