Date: July 1, 2009
Contact: Steve Jensen: 860-702-3308/3301
E-mail: Steven.Jensen@po.state.ct.us
REVENUES CONTINUE TO FALL, BUT LEGISLATIVE ACTION CUTS DEFICIT TO $911 MILLION
State Comptroller Nancy Wyman today said that the 2009 budget deficit has improved slightly to $911 million, due to action by the General Assembly that offset a continued drop in tax revenue.
While overall tax revenues declined by about $15 million since last month, the recent passage of a "deficiency bill" to cover state agency fiscal shortfalls by reducing other appropriations resulted in a net $3 million improvement in the deficit projection.
The biggest drop in revenue was a $10 million dip in the payroll-withholding portion of the income tax. The state has lost more than 63,000 jobs since May 2008.
"Connecticut’s job picture has been in steady decline for more than a year and the income tax has bottomed out right along with it," Wyman said.
Overall collections of the income tax, including capital gains payments, are down 15 percent from last year. The tax was expected to bring in about $7.6 billion, but will likely fall about $1.3 billion short of that estimate.
The sales tax, expected to produce about $3.7 billion, will bring in about $420 million less than projected. Taxes that corporations pay on profits are expected to fall about $200 million under the original estimate of about $790 million.
Wyman's deficit projection includes about $550 million of deficit-mitigation steps and state employee labor concessions approved by the legislature.
Although the 2009 fiscal year ended June 30, the state continues to collect certain tax accruals through July 31. A final deficit figure will be issued in September.
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