The checks are not in the mail. Governor Dannel Malloy announced several months ago that the State of Connecticut had an over $500 million budget surplus for the end of the fiscal year, and will refund Connecticut taxpayers who learn less than $200,000 a one time $55 refund as one means to disperse the anticipated surplus.
However, due to the shortfall in tax revenue, mostly in capital gains and corporate taxes, which is projected to be a wide range of anywhere between 10% and 305 below revenue, Governor Malloy's Budget Director and Stratford native, Benjamin Barnes wrote to leaders of the Connecticut General Assembly plans to forego the proposed tax refund.
"Based on the income tax collections received so far, it is clear that taxes on capital gains in 2013 will be hundreds of millions below expectations. This is a result of the expiration of the Bush tax cuts on January 1, 2013 which impacted our revenues more than consensus revenue projections anticipated. At the end of 2012, many investors across the country realized capital gains in order to take advantage of the lower tax rate. This in turn created a large federal tax penalty on capital gains realized in 2013 if those assets were held less than one year," wrote Barnes to the State Legislature.
Barnes also attributed the expiration of President George W. Bush era tax cuts that expired at the start of the year, which in turn made 2012 investments retroactive as taxable income for 2013.
"We have not yet established consensus revenue, but will by April 30. Any surplus this year will be deposited into the Rainy Day Fund. We do not anticipate enough revenue to provide a tax refund or to make a supplemental pension payment, as we had hoped in January," noted Barnes