Connecticut’s tax revenues got a significant bump in the last month, with an additional $900 million in receipts beyond what was forecast. But Governor Dannel Malloy is cautioning that lawmakers should not believe the state’s deficit issues are over.
Malloy told a Monday news conference that while he welcomes the additional revenue, some of the money may reflect people paying taxes early before the recent changes in the Republican overhaul.
Another significant boost may have come from hedge fund managers repatriating profits held overseas, something they were required to do before a federal deadline at the end of 2017.
Malloy said it’s still not clear whether that means tax revenues will drop later in the year.
“Until more time passes, specifically January 15 and April 15, it’s difficult to know exactly where we are,” he said, referring to upcoming tax filing deadlines. “There’s reasons to believe that we’ll have more money in the bank that we would have otherwise. There’s no doubt in my mind that some portion of the dollars that were paid prior to January 1 are dollars that would have otherwise have been paid after January 1.”
The governor did say the trend was promising for the state.
The bulk of the money will be directed to the Rainy Day Fund, a provision that’s required if the income is believed to be a one-time revenue source.