NEW YORK (Reuters) - Connecticut will cancel pay raises for managers at state agencies after the latest projections suggest the state’s fiscal situation may be much worse than previously thought, top officials said on Monday. The canceled raises are an early indication of the harm done by the state’s fiscal crisis. Many more cuts are expected this year as officials struggle with a budget deficit that could be as high as $900 million in the coming fiscal year. Although high-profile, the amounts involved are largely symbolic. The cancellations will affect 1,950 employees and represent savings of $12.74 million over two years. The figure does not include pay freezes in the judicial branch.  Connecticut has had to slash its revenue forecast because the weak stock market is cutting into capital gains tax receipts, which play a large role in the budget. It also met resistance when it tried to raise taxes. General Electric moved its headquarters out of the state earlier this year.   “We have a responsibility to the taxpayers of Connecticut not to move forward with managerial raises at a time when so many state programs will see reductions and while many state jobs are likely to be eliminated,” wrote Ben Barnes, secretary of the Office of Policy and Management. The letter was co-signed by Brian Durand, chief of staff to Democratic Governor Dannel Malloy. A report last week from the non-partisan Office of Fiscal Management said the deficit could be as high as $900 million in the next fiscal year, which begins on July 1. An earlier estimate from Barnes’ office put the deficit at $570 million.    Most of the raises, which have already been postponed twice, would have been awarded on Friday. They will be suspended indefinitely. 