Saturday, March 28, 2009

Governor Rell: Revenue Drop Continues to Erode Bottom Line of Projected Two-Year Budget

Governor M. Jodi Rell today announced the economy continues to erode all major revenue streams for the state, eroding the bottom line for her proposed two-year $38 billion budget presented to the Legislature nearly two months ago.
The Office of Policy and Management outlined its revised revenue estimates today in a letter to the Governor. The report takes into account the latest projected tax revenues, including personal income tax and sales tax as well as casino revenues and other fees and estimates the cumulative two-year deficit at just over $7 billion.
“Today’s report from the Office of Policy and Management makes it abundantly clear that the recession continues to ravage our revenue. I continue to be disappointed by the lack of any semblance of urgency from the Legislature to address the state’s two-year budget,” Governor Rell said. “It is well past time to stop fiddling around the edges and seriously focus on the task at hand – deliver a balanced budget for the taxpayers of Connecticut. Municipalities are crafting their budgets now and the longer we wait to give them a solid idea of what they can expect in state aid, the harder it will be on local property taxpayers.”
OPM reported in its letter today that since the Governor presented her budget on February 4, estimated revenues for Fiscal Year 2010 have been revised downward by $721.4 million and, in Fiscal Year 2011 by $671.5 million. Personal income tax dropped $371 million and $507.5 million in FY 2010 and 2011, respectively. Sales and use tax dropped $144.5 million and $151.2 million for each year.
“Frankly these revenue deteriorations are not altogether surprising given the worsening national economy and steep drop in almost every leading economic indicator over the last two months,” OPM Secretary Robert Genuario wrote. “While the numbers are deeply concerning, we still believe that our 2 year projected deficit will be far below that projected by OFA ($7.39 billion vs. $8.7 billion).
The Governor said OPM expects to deliver its final projection for the biennium shortly after the April 15 income tax deadline.


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