Comptroller Kevin Lembo said in a statement on June 1 that, following spending rescissions last month, the state is on track to end the current fiscal year in deficit by $325.4 million.

The Budget Reserve Fund has a current balance of $235.58 million, which is insufficient to cover the deficit.

In a letter to Gov. Dannel P. Malloy, Lembo said that his deficit projection remains slightly higher than the deficit reported by the Office of Policy and Management (OPM) because Lembo believes the state will spend more than initially planned on ongoing settlement payments related to the SEBAC vs. Rowland case.

Lembo cautioned against borrowing to close the deficit, as the state continues to bear the burden of this approach from several years ago.

“Connecticut cannot afford to repeat past mistakes that continue to burden our budgets today,” Lembo said in a statement. “The state should avoid using economic recovery notes to finance any residual deficit, as interest rates are likely to rise and the state continues to pay the costs of debt service payments on $915.8 million in recovery notes that were issued in 2009 to close a deficit at that time.”

A portion of those economic recovery notes were refinanced in October 2013. The remaining balance on those notes at the end of fiscal year 2016 was $352.6 million, with a payment this fiscal year of $167.7 million.

As Lembo first projected earlier this year, the income tax revenue has fallen significantly short of the budget plan, by $532.2 million. Since the inception of the income tax, Connecticut averaged 9 percent annual growth in the income tax through 2008, at which point the average has been 2 percent. As the state Department of Revenue Services (DRS) reported, following each of the past two income tax increases, the average tax liability for the state’s wealthiest residents increased in one year, and then fell the next.

Lembo also said in a statement that the state’s population loss has likely contributed to downward pressure on state tax receipts.