The state is collecting $123 million more in tax money than originally expected this year for a variety of reasons, including a tax amnesty program that has been more successful than expected.
The collections are $30 million higher than the original budget projections due to the amnesty program that expires on November 15, according to the legislature’s nonpartisan fiscal office. The amnesty program, overseen by tax commissioner Kevin B. Sullivan, has generated nearly $63 million so far from those who owed back taxes.
In another category, the state’s sales tax is projected to increase by $30 million over the original expectation as money has been coming in stronger than expected. State officials are hoping to see strong tax collections from the all-important Christmas shopping season that often makes the difference between a profit and a loss for the year for retailers.
The latest tax projections, released Friday afternoon, are required by a state law that forces the nonpartisan fiscal office to try to reach a consensus with the governor’s budget office on the numbers. That law was prompted when Republican Gov. M. Jodi Rell and the Democratic-controlled legislature could not agree on the numbers near the end of her tenure.
In addition, the real estate conveyance tax is up by $15.6 million as the real estate market is starting to rebound after a massive slump that started around the time that the Lehman Brothers investment bank collapsed in New York City in September 2008 and the stock market took a huge nosedive. Since then, the Dow Jones Industrial Average has sharply rebounded and has been setting records.
On the down side, money from the state’s electric generation tax was down by $2 million for a tax that was phased out in October, according to Alan Calandro, the head of the fiscal office.
Ben Barnes, the budget director for Gov. Dannel P. Malloy, cautioned that the numbers could be changing in the future with the ups and downs of the economy.
“These estimates are a snapshot of the situation four months into the fiscal year”, he said in a statement. “The federal shutdown seems to have hampered the economic recovery both nationally and in Connecticut, but we are not yet sure of the extent of that damage to state revenues, which are a month or two behind. As always, we will closely monitor revenues and expenditures and manage state government to ensure this year’s budget will remain balanced and may even show a small surplus next summer.”
The fiscal year ends on June 30, 2014 – several months before the 2014 gubernatorial election.