Current state budget slips deeper into the red
The state’s budget rollercoaster ride through the current fiscal year took another dip Friday as Gov. Dannel P. Malloy’s administration reported a $133 million deficit, more than doubling the red ink from one month ago.
In its monthly letter to Comptroller Kevin P. Lembo, the governor’s budget office said its deficit forecast had worsened by almost $72 million over the past month.
About $45 million of that change involves federal Medicaid payments that will be less than originally anticipated, Office of Policy and Management Secretary Benjamin Barnes wrote to Lembo. Another $18 million involves a shortfall in projected receipts from the state’s tax on hospitals.
Barnes also used his letter to repeat an earlier warning about the high fiscal stakes Connecticut faces in the next month.
State government still needs to receive several hundred millions of dollars in income tax payments in the days leading up to the April 15 filing deadline to reach the revenue levels built into this budget.
The latest deficit projection represents less than 1 percent of this year’s general fund, which covers the bulk of the state’s annual operating expenses. But that shortfall still is significant.
That’s because Connecticut has just $519 million in its emergency reserve, commonly known as the Rainy Day Fund. And as the current year’s budget deficit grows, that means more of the reserve might be needed to close it, and less would be available for use as revenue to help balance the next state budget.
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