Connecticut's budget shortfall to double next fiscal year

Reuters News
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Posted: Nov 11, 2015 5:34 PM

By Edward Krudy

NEW YORK (Reuters) - A shortfall in Connecticut's tax revenues will accelerate next year to reach a total of more than $600 million over its two-year budget period in a further blow to the fiscally struggling state, a report by budget officials shows.

The revenue shortfall is expected to hit $217.8 million this fiscal year, which ends June 30. It nearly doubles in the next fiscal year to $401.8 million, according to a state fiscal report released late on Tuesday.

"Revenues are just not as robust as had been expected," said Doug Offerman, an analyst at Fitch Ratings. "It's a reflection that the state sees the revenue problem that they have started the fiscal year with extending into next year," he said.

Governor Dannel Malloy called in October for bipartisan budget talks after officials said there would be a shortfall of at least $120 million this fiscal year. Malloy later announced plans to lay off an additional 500 state workers and defer raises for 1,600 managers.

Malloy attributed the revenue shortfall to lower capital gains tax collections due to the weak stock market.

(Reporting by Edward Krudy; Editing by James Dalgleish)