Revenue

Revenue is the income or money the State receives from taxes, fees, and other sources. Almost all of Connecticut’s revenues come from taxes on Connecticut residents. Since fiscal year 2000, Connecticut's General Fund revenues have increased 33 percent overall — rising from $11.6 billion in 2000 to $15.4 billion in fiscal year 2016.

The State's largest source of revenue in fiscal year 2016 was the Personal Income Tax, which yielded over $9.3 billion or 56 percent of the State's total revenues. Along with the Personal Income Tax, Connecticut's greatest sources of revenues for fiscal year 2016 came from the Sales & Use Tax ($4.3 billion or 26 percent) and the Corporations Business Tax ($896 million or five percent). Together, these three revenue sources alone accounted for $14.5 billion (86.9 percent) of Connecticut's $16.7 billion in gross revenues in fiscal year 2016. 

Over the past 17 years, there have been numerous changes to the tax code, including Personal Income Tax rate increases (2003, 2009, 2011, and 2015), an increase to the Sales and Use Tax rate (2011), and multiple changes to the surcharge rate for the Corporation Business Tax. But despite these changes, revenues have stagnated in recent years, and the State's actual realized revenues have routinely fallen short of the revenues projected in the budget. 

Since fiscal year 2000, realized revenues have exceeded projected revenues in nine of 16 years. The other eight years, there were shortfalls in realized revenues. However, of the eight years with revenue shortfalls, six have occurred since the Great Recession.

The average revenue surplus in years where realized revenues exceeded projections was $470 million while the average revenue shortfall, in years where realized revenues fell short of projections, was $477 million. In fact, the cumulative revenue shortfall since the Great Recession, less the surpluses in fiscal years 2011 and 2013, is approximately $1.9 billion.

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