Connecticut Comptroller Kevin Lembo is projecting a $594.5 million deficit in the state budget for fiscal year 2018.
In a letter to Gov. Dannel P. Malloy, Lembo said this new projection is slightly lower than the forecast issued by the Office of Policy and Management due to a recent state settlement delay.
This one-time windfall in estimated and final income tax collections totals $4.54 billion, and Lembo explained that approximately $1.39 billion of income tax revenue would exceed the state’s new volatility threshold. As a result, approximately $779.4 million will likely be transferred to the state’s Budget Reserve Fund, which would bring that fund to approximately $992.3 million, or roughly 5.25 percent of the state’s General Fund budget.
“Connecticut’s budget results are ultimately dependent upon the performance of the national and state economies,” Lembo said. “Recent indicators show that the State of Connecticut continues to lag behind the nation’s economic recovery in key areas.”