Ben Barnes mark pazniokas /
Budget director Benjamin Barnes
Budget director Benjamin Barnes mark pazniokas /

Gov. Dannel P. Malloy’s administration scaled back its deficit forecast Tuesday for the current fiscal year, citing additional savings in the Judicial Branch and in fringe benefit costs.

The Office of Policy and Management now is projecting a $41.6 million deficit for 2016-17, an improvement of $26.1 million from the nearly $68 million shortfall it reported one month ago.

This new deficit represents less than one-quarter of 1 percent of the General Fund, which covers the bulk of operating costs in the state budget.

Despite the deficit’s very modest size, there is some disagreement over the condition of Connecticut’s finances.

Both Comptroller Kevin P. Lembo and the legislature’s nonpartisan Office of Fiscal Analysis projected large deficits in their last reports.

OFA reported a shortfall of $77.5 million on Nov, 15 while Lembo, whose last forecast came on Nov, 1, pegged the deficit at $82.3 million.

Lembo, nonpartisan analysts and the administration also have warned that the state revenue picture remains volatile. OFA and the governor’s budget office must submit their next consensus revenue projection to the General Assembly on Jan. 15.

Lawmakers and the governor have much larger shortfalls to contend with when they begin crafting the next two-year state budget in early February.

Nonpartisan analysts say that state finances, unless adjusted, are on pace to run almost $1.5 billion in deficit in 2017-18 and $1.6 billion in the red in 2018-19. Malloy already has warned legislators he will not propose any major tax increases to help balance the books, meaning he also will recommend deep spending cuts.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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