HARTFORD, Conn. (AP) – Connecticut Gov. Dannel P. Malloy is ordering spending cuts as revenue comes up short more than halfway through the state’s budget year.
Malloy said Tuesday that revenue is estimated to decline by about $95 million in the budget year that ends June 30 and by $139 million next year.
The revenue shortfall comes despite across-the-board tax increases last year as Malloy and the legislature cut a $3.5 billion deficit. Spending cuts were imposed and contracts with state workers were renegotiated.
Malloy blamed the revenue decline almost entirely on reduced income tax revenue, particularly among higher income taxpayers who file quarterly returns. He says taxpayers are shifting capital gains and income because they are uncertain if federal income tax cuts will be extended by President Barack Obama and Congress.
(Copyright 2012 by The Associated Press. All Rights Reserved.)