CT Coronavirus Cases Are Up, But So Are State Revenues: Lamont

CONNECTICUT — On a day when hospitalizations for the coronavirus reached a high not seen since June 12, Gov. Ned Lamont found what he called "relative good news" in the least likely of places: the state budget projections.

During a news conference Monday, the governor said the state began to budget conservatively at the start of the pandemic, unable to predict what effect it would have on the local economy or upon the stock market. That discipline — along with some unforeseen lucky breaks — is now beginning to pay off.

Connecticut's projected fiscal 2021 deficit is down $1,262 million, from $2,025 million predicted in September. That's a $763 million improvement, or 40 percent reduced deficit, in the past month. The state's fiscal year ends June 30.

As any financial planner will tell you, the best way to save money is to make money, and the state's accomplishing that in spades, according to the governor. Revenue projections have improved by $454 million.

That cash influx is coming primarily from an influx of out-of-staters and their tax receipts.

Since the start of the pandemic, "We've had tens of thousands of people move to the state of Connecticut, we're one of the 'magnet states,'" Lamont bragged.

Once a "net loser," according to the governor, referring to a years-long migration of residents fleeing the state's higher tax rates, Connecticut is now a go-to haven for families fleeing high coronavirus infection rates.

"They are paying sales tax, some of them are paying a capital gains tax," Lamont said.

Indeed, much of the new projected revenue — $259 million — comes "more from wealthy people," according to the governor.

"Who would have thought, back in April or May, that the stock market would have doubled in the past 6 months, up 14 percent over the whole year? Those folks are going to be contributing a little more to our state," Lamont said.

State accountants are projecting they'll rake in another $159 million through withholding, sales and use, cigarette and conveyance taxes — revenue categories that are all outperforming their targets, according to the governor.

Sales tax numbers benefit from increased internet sales tax revenue, Lamont said. Large online market facilitators like Amazon began collecting taxes from third-party retailers, and remitting them to the state, in compliance with a law that went into effect December 2018.

"That really helped save us a fair amount of what could have been lost revenue on the sales tax side," Lamont said.

The landscape for projected expenditures has also gotten a lot rosier, due, oddly enough, to COVID-19. Most of the $309 million in expenses trimmed from the budget was healthcare related. $155 million in Medicaid relief came from additional COVID-related federal reimbursement, as well as lower levels of service utilization — fewer people are going to the hospital unless they absolutely need to, Lamont said.

Employment, while not exactly "roaring back," was back up to a respectable 93.3 percent at the end of September, from depths of 82.9 percent in April, the governor said.

"Right now, compared to our peers in other states, our budget is in a relatively good position," Lamont said, before adding: "This can change pretty fast."

This article originally appeared on the Across Connecticut Patch