Good news on the financial front, whether in Connecticut, nationally or globally, is rare enough at the moment that you can’t let it go by without at least taking note of it, so it’s perhaps with some extra pleasure that we observe an increase in the state’s coffers since the onset of the coronavirus pandemic.
This might seem unlikely, and it should be added that the impact of the pandemic has yet to be calibrated, but state legislators learned recently that receipts from what the Associated Press called “a key subset” of the state income tax were a reported $175 million beyond expectations since the July 15 tax deadline. The final tally is likely to be even better. At the half-way mark, income tax receipts were just $350 million shy of the collection goal.
We’re urged to regard such good news with caution, which is probably a good way to go about any financial news amid a global crisis, but the situation for the state is much better than it was in April, when there was warning about state revenues shrinking – and, let’s just put it this way: We’ll take any good news we can get.
The warnings to heed come from Melissa McCaw, the budget director, who told the AP that while the numbers are getting better, most of the payments came from earnings before mid-March, which is when the outbreak of the coronavirus occurred and unemployment applications began to climb.
“We still face an ongoing public health pandemic with economic and unemployment challenges for an unknown duration,” said McCaw.
And of course the state still faces enormous deficits, a projected $2.5 billion for the current fiscal year and $2 billion for each of the two fiscal years following. Revenues trending in a positive direction could help, but likely not enough when it comes to eliminating such large deficits.
So with warnings and the need for caution acknowledged, we’ll still consider it good news.