When Governor Dannel Malloy signed THIS YEAR’S state budget he said it was balanced…but he wasn’t telling the truth.
In fact, it was off by nearly a billion dollars. Budget cuts and layoffs have reduced some of the gap, but when the year ends in ten days – on June 30, 2016 – the state will need to grab much of Connecticut’s “rainy day” fund to balance the books.
Connecticut’s budget deficit has grown to $315.8 million and the state will have to use more of the Rainy Day Fund than expected to cover the shortfall in this year’s budget.
Office of Policy and Management Secretary Ben Barnes said Monday that the deficit has increased by about $56.7 million from last month’s estimates. It means the state will only have about $90.2 million left in its Rainy Day Fund because it will have to use $315.8 million of the $406 million Rainy Day Fund to close the deficit.
In his monthly letter to state Comptroller Kevin Lembo, Barnes said that revenues continue to decline. The personal income tax is down about $75 million and the sales tax is down about $28.2 million.
But the even more serious problem is with the budget that begins on July 1, 2016 and runs through June 30, 2017 (FY17 budget).
Again, Malloy and the Democrats have done Connecticut an extraordinary disservice by not setting up a revenue and expenditure plan that balances.
The establishment will try to keep the magnitude of the problem secret until after the November legislative elections, but despite massive layoffs and record cuts to public schools, human services and healthcare, the austerity budget that Malloy and the Democrats passed this spring – and claimed produced a balanced budget – is at least a quarter of a million ($250m) dollars out of balance.
With only $90 million left in the raining day fund, Malloy and his team has created a situation in which they have allowed him to drain the state’s reserves and burden Connecticut’s taxpayers with a massive deficit in the coming fiscal year.
Keith Phaneuf adds more in his article entitled, Outgoing CT budget deficit swells, hints at more red ink to come
The fact is that fiscal irresponsibility is major barrier to economic activity.
The state, its business community and especially its taxpayers would have been better off if Malloy had dealt honestly with the need for appropriate revenue to ensure vital services were maintained and the budget was balanced.