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June 21, 2017

Half of CT's rainy day fund to be used to cover FY17 shortfall

HBJ File Photo State budget chief Ben Barnes (left) with Gov. Dannel P. Malloy.

Connecticut expects to close the 2017 fiscal year with a $107.2 million deficit that will be covered by the state’s rainy day fund, according to Office of Policy and Management Secretary Ben Barnes.

The shortfall has decreased from the $215.5 million forecast in May, Barnes said. The latest shortfall will be “extinguished” by using budget reserves, leaving a balance in that fund of $128.4 million, Barnes said.

The secretary noted that a state law covering deficit mitigation has allowed revenue transfers to ease the debt.

The deficit is being created by several underperforming tax collections. The largest decrease in revenue is in the sales and use tax, down $34.1 million, he said.

The Special Transportation Fund also is expected to have a $47.1 million deficit, $13.3 million more than forecast last month. The largest decline in revenue is in motor vehicle tax receipts, down $6 million, Barnes said.

The 2017 budget will be fully reconciled in July.

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