Malloy Orders Spending Cuts

HARTFORD (AP) — Connecticut Governor Dannel P. Malloy is ordering spending cuts as revenue comes up short more than halfway through the state’s budget year.

Gov 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 Gov Malloy and the legislature cut a $3.5 billion deficit. Spending cuts were imposed and contracts with state workers were renegotiated.

The governor 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.