According to Connecticut law, by the twentieth day of each month, the Governor’s Office of Policy and Management must provide the Office of the State Comptroller with a statement of “revenues and expenditures for the General Fund.”
Using this information, and his own budget experts, the State Comptroller then produces the state’s official financial statement that is released on the first of each month.
A couple of weeks before the election, OPM reported that the projected deficit was $60 million.
A couple of weeks after the election, OPM reported that the projected deficit was $365 million.
As to the question of whether a state deficit could leap from $60 million to $365 million in thirty days, the answer is a simple and resounding – “No.”
So what is going on?
On October 19, 2012, Ben Barnes, Governor Malloy’s budget chief, wrote to State Comptroller Kevin Lembo to report, “We are projecting the General Fund will experience…a $60.1 million shortfall on a budgetary basis, a change of $33.2 million from last month.”
Now, thirty days later, OPM Secretary Barnes, in his monthly letter to State Comptroller Kevin Lembo, is observing that the projected budget deficit is actually six times larger than he had projected, only a month ago.
Now Barnes is reporting that state revenues are down ANOTHER $144.9 million, including $100 million in “unexpected refunds” of income and corporation taxes. OPM lowered the amount the state is expected to collect from the corporation tax by $51.8 million and the amount that will come in from the state sales tax by $43.7 million.
Even more enlightening is that whereas OPM alluded to the fact that it will probably spend $100 million more than expected on health care costs for poor, Medicaid recipients, the letter Barnes sent to Lembo yesterday reports that the Malloy Administration will spend at least $294.1 million MORE than the amount allocated in the state budget that was passed by the Legislature and signed into law by the Governor.
The number is at least $160 million more than OPM projected last month.
Tens of millions of dollars in excess spending is related to costs in non-Medicaid spending, including cost over-runs in the Department of Corrections, the Department of Emergency Services and Public Protection and in other state agencies.
It would appear that some of these higher costs are related to excess personnel costs meaning that Malloy Administration knew for quite some time that payroll costs were going to exceed what had been budgeted for those agencies.
Last week, Governor Malloy and his advisers sought to dismiss any criticism by suggesting that State Representative Larry Cafero, the Republican leader in the House of Representatives, was merely trying to score political points by criticizing the Administration’s handling of the budget.
However, Malloy and some in the media, who simply run with that story, are doing a tremendous disservice to the truth.
While Cafero may very well be attempting to score political points, after all, he is a politician and the political leader of the opposition party; the issues he is raising are legitimate.
In fact, if the tables were turned and it was a Republican Governor announcing massive budget deficits, the Democrats would be calling for legislative hearings and some would even be suggesting that Administration Officials be called to testify, under-oath, so that the Legislature could determine who was involved in the effort to cover-up the magnitude of the budget problems leading up to the election.
The budget analysts who work for the Office of Policy and Management, the State Comptroller and the Office of Fiscal Analysis are some of the most talented people in their field. There is absolutely no question that some of these experts understood the magnitude of the budget problem.
The unanswered question is not whether the professional staff within state government understood that the budget crisis was getting worse, but why those in more political positions chose to withhold the information from the public.
CT Newsjunkie has the latest at: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/barnes_confirms_365m_deficit/ or you can read OPM Secretary Barnes’ letter to State Comptroller Kevin Lembo at http://www.ct.gov/opm/lib/opm/budget/comptrollerletter/fy2013/2012nov20comptrollersletter.pdf