Monday, November 12, 2012

Brother can you spare $300 million?


Oops. Connecticut is coming up short of funds, upwards of $300 million, for its fiscal 2013 budget. Governor Malloy is between a $300 million rock and a promise to not raise taxes hard spot.

The story in the link portrays this as something of a surprise, but it's not. The source of this forecast is something called the Connecticut Consensus Revenue Report. They arrive three times a year and give out year projections of the expected revenues from taxes, other revenue (gaming payments, licenses, transfers) and other sources, mostly Federal grants. The graph below shows the estimated "Taxes less refunds" the biggest chunk, about $15 billion, of the $21 billion total CT revenue expected for FY13. You can see the big Malloy tax increase in October of 2011 and you can see the forecast was optimistic from the very start. The current estimate of total taxes less refunds is $439 million lower than originally expected.

But not to worry. Let's tax the rich. After all, Keith Richards has a house in Connecticut and surely he wouldn't mind paying more of his fair share.


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