After several years of budget surpluses, state lawmakers will return in January facing a potential fiscal 2026 budget deficit of more than $300 million.
Recent revenue projections showed some gains in anticipated income, estate and bank tax revenue But there are also projected declines in lottery income, business and insurance taxes.
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The biggest part of the deficit is structural, with costs exceeding projected revenue. This includes rising personnel costs and some recurring spending covered in recent years by funding that has run out or fallen short.
State departments that are annually asked to curb spending requests will likely be held to some of those projections next year.
Gov. Daniel J. McKee will take the first crack at the next state budget in January.
