Despite the political spin that he had put Connecticut’s fiscal house in order, Governor Dannel Malloy has presided over a continuous sea of red ink when it comes to the Connecticut state budget.
As Keith Phaneuf explains in a recent CT Mirror article entitled, CT budget closes in deficit again; little reserves left for this year,
“The governor insisted throughout his 2014 re-election campaign that nonpartisan deficit forecasts were wrong, and that growth projections for Connecticut’s economy — and correspondingly for state revenues — were too conservative.
But state government has had nothing but deficits since the governor’s re-election. Connecticut closed the 2015 fiscal year with the General Fund $113.2 million in the red.
Malloy began to acknowledge in the summer of 2015 that the economic growth he’d predicted was lagging, and by January 2016 he’d begun declaring repeatedly that Connecticut faced a “new economic reality” of modest growth. The Democratic governor’s Republican critics say this economic shift was evident years earlier and that the governor would not admit it until after he had won a second term.”
The actual numbers paint a stark and depressing picture:
Connecticut’s string of budgets in deficit:
Fiscal Year15 $113 Million Deficit
Fiscal Year16 $170 Million Deficit
Fiscal Year17 Present year – Deficit (To Be Admitted)
Fiscal Year18 $1.3 Billion Deficit (Projected)
Fiscal Year19 $1.6 Billion Deficit (Projected)
Despite two record tax increases and unparalleled budget cuts over the last six years, Connecticut is facing a budget shortfall of about $3 Billion in the next budget cycle.
Adding to the fiscal crisis is the fact that Governor Malloy and the Democratic members of the General Assembly have left Connecticut with a “Rainy Day Fund” of only $236 million, or about 1.3 percent of the state’s annual operating costs. Comptroller Kevin Lembo recommends that Connecticut’s “Rainy Day Fund” should be in the range of 15 percent of annual operating expenses, a number which means that Connecticut has a fund that is less than 10 percent of what we should have set aside for difficult economic times.
And yet, in response, Malloy continues to downplay the problem, with his spokesperson telling the CT Mirror
“The year that ended on June 30, 2016, was an extraordinarily difficult one,” Malloy spokesman Chris McClure said. “Income tax receipts were $650 million below budget, and the state was repeatedly compelled to take difficult steps to mitigate a developing deficit. We should be gratified that the hard work of state workers and the commitment of the legislature helped us to preserve more than $200 million of our Rainy Day fund, even in the pouring rain.
“We will continue to hold the line on the budget to ensure we fulfill our solemn obligation to balance the budget for FY17,” McClure said. “Our most current budget estimate, issued September 20th, is that the state is on track to meet its budget targets for FY17.”
However, the fiscal reality is that Connecticut’s budget is not on target.
Malloy and public relations team are intentionally overlooking the news that revenues are falling short and expenses are actually going to be significantly higher than authorized.
It would not be at all surprising if this year’s shortfall exceeds $200 million, eating up the remaining $236 million in the “Rainy Day Fund.”
But with Election Day a month away, look for Malloy to duck any mention of this year’s budget deficit until after November 8, 2016.
Then, and only then, will the people of Connecticut be told about Connecticut’s continuing budget deficits.