All eyes on April consensus revenue estimate

Back • April 3, 2012 • Uncategorized

With three months left in the current fiscal year – and as deficit projections grow – lawmakers are waiting on a critical revenue estimate from the Office of Fiscal Analysis, expected after the April tax filing deadline, to help clear things up.  The CT Mirror reports:

The game of ever-shifting state budget forecasts took another new twist Monday as Comptroller Kevin P. Lembo announced a worsening deficit that largely matches the shortfall reported by nonpartisan legislative analysts.

Both offices now say Gov. Dannel P. Malloy — who continues to project a small surplus — will need to find roughly $115 million over the next three months both to finish in the black and maintain his promised conversion of state finances to Generally Accepted Accounting Principles, commonly known as GAAP.

Lembo also said Monday that Malloy could be bailed out later this month if revenue forecasts improve.

"All eyes are on April," Lembo wrote in his latest monthly budget report, referring to the updated revenue forecast analysts will prepare shortly after the income tax filing deadline of April 2011.

Throughout much of the current fiscal year, state revenue estimates have had to deal with a significant degree of uncertainty as the state earned income tax credit went into effect, and as households adjusted their withholding levels in response to the major income tax changes contained in the FY 2012-2013 biennial budget. 

If revenue estimates continue to trend below previous expectations, Governor Malloy will ask legislators to make emergency spending cuts to make sure the budget is in balance before the fiscal year ends on June 30.  The real possibility of a deficit in this fiscal year, combined with a much larger projected deficit for FY 2013, highlights the need for lawmakers to revisit revenue-raising measures in the next legislative session.