As the CT Mirror is reporting, Governor Malloy’s extraordinary budget gimmicks and Connecticut’s lagging economy have caught up with the politician’s wild re-election promises.
The CT Mirror’s Keith Phaneuf reports,
“Citing declining state revenue projections, Gov. Dannel P. Malloy gave up Monday on two of his biggest re-election year budget initiatives: a $55-per-person rebate and a supplemental payment into the state employees’ pension fund.
“We do not anticipate enough revenue to provide a tax refund or to make a supplemental pension payment, as we had hoped in January,” Benjamin Barnes, who oversees the budget as secretary of policy and management, wrote in a letter sent Monday morning to legislators.
While the Governor and his budget chief sort of skipped over the ugly details, the underlying problem is that Malloy’s rosy economic forecasts failed to materialize.
Last week the General Assembly’s Office of Fiscal Analysis reported that Connecticut Income Tax revenues were going to be $330 million short of what has been predicted.
This shortfall in revenue not only opens a huge problem for Malloy’s budget proposal for the fiscal year starting on July 1, 2014 but increases the projected budget shortfall for the following year’s budget to over $1.2 billion dollars.
Malloy, who has pledged not to increase taxes if re-elected is nowlooking at budget deficits of over $1 billion for each of the next four years if he is re-elected.
Claiming that he was sitting on a $500 million surplus this year and even more money next year, Malloy promised a series of election year tax-cuts including a $55 rebate to all individuals earning less than $200,000, and a $110 rebate to all couples earning less than $400,000.
Malloy also promised that he would pay an additional $100 million into the state employees’ pension fund, a fund that is approximately $11 billion underfunded.
But as the CT Mirror explains, income tax revenue has not come in as projected and the excessive use of one-time revenue and borrowing for ongoing expenses means Connecticut will continue to face extremely serious fiscal problems over the next few years.
You can read the entire CT Mirror story here: http://ctmirror.org/malloy-gives-up-on-tax-rebate-citing-declining-revenues/
The CT Newsjunkie’s article on this breaking story can be found here: http://www.ctnewsjunkie.com/archives/entry/malloy_scraps_55_rebate/, while the Courant’s article is here: http://www.courant.com/news/politics/hc-malloy-tax-rebates-20140428,0,4875051.story.