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Calling the numbers “sobering,” Connecticut Gov. Ned Lamont previously said that Connecticut will end the fiscal year with a $1 billion budget shortfall, with the number potentially doubling over the next cycle, which begins in July.
Budget numbers released by the Office of Fiscal Analysis show Connecticut’s budget deficit this year grew to over $1 billion, an increase of more than $687 million over the previous estimate.
Sales tax revenue dropped by $281.9 million as businesses shut down due to the pandemic, while income tax has an estimated revenue coming in nearly $500 million below budget projections. Gaming revenue is down $180 due to the closed captions, and the Transportation Fund is down $134 million.
"The Office of Fiscal Analysis projects a General Fund deficit of $958.5 million and a Special Transportation Fund deficit of $99.7 million in 2020," the office wrote in a report. "In total across both funds, revenue projections for taxes and other revenue categories are revised downwards by $687.9 million from our previous estimate to reflect the ongoing impact related to COVID-19."
According to a report from the Yankee Institute for Public Policy, “in effect, the Rainy Day Fund is likely already gone for the foreseeable future and Connecticut will be faced with escalating costs and much lower revenue
“Economists were initially hopeful that the economy could see a quick rebound if a cure or vaccine for the COVID-19 virus was found and stocks have been moving higher on positive reports that a vaccine or treatment is in development,” their study noted. “But the long-term fallout from the closure of businesses may not be so easily overcome.”
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