Ben Barnes (OPM Secretary), Budget Cuts, Kevin Lembo, Malloy, State Budget, State Deficit Kevin Lembo, Malloy, State Budget, State Deficit
Just when you thought it couldn’t get more bizarre…
On Monday, State Comptroller Kevin Lembo, whose office was created in 1786 “to provide accounting and financial services, to administer employee and retiree benefits, to develop accounting policy and exercise accounting oversight, and to prepare financial reports for state, federal and municipal governments and the public” performed his monthly legal duty by releasing what is called his Letter of the First.
The Letter of the First is the legal document that serves as “a monthly analysis of the state’s budget condition that contains the financial statements for the latest month and projections for the budget position to year’s end.”
In that letter, Comptroller Lembo determined that this year’s projected state deficit is $415 million, not the $365 million that the Office of Policy and Management had previously announced.
As required by law, if the State Comptroller determines that there will be a projected deficit of greater than 1 percent of the state budget, the Governor MUST develop and propose a Deficit Mitigation Plan and the Connecticut General Assembly must meet to consider that plan.
According to CTNewsjunkie’ s coverage of developments, “Gov. Dannel P. Malloy wasn’t concerned that state Comptroller Kevin Lembo certified a deficit that was $50 million higher than the one his budget office estimated last month.”
Malloy told reporters, “These numbers are going to go up and down…We’re moving forward with our package, which addresses a set of numbers.”
But of course, under the law, it is totally irrelevant what Malloy and his budget office think. If the State Comptroller certifies that there will be deficit of greater than 1 percent, the Governor has the legal obligation to propose a solution to address that deficit.
According to CTNewsjunkie, Governor Malloy then went on to say, “The comptroller thinks we will spend more money than we did — he may be right…I was told similar predictions were made last year and they didn’t turn out to be right, so we’re dealing with the numbers we believe currently represent that challenge.”
Malloy’s suggestion that Lembo has been wrong in the past is off-base, but even more importantly, as was just noted, IF the individual who is legally responsible for being the state’s fiscal watchdog says the projected deficit is $415 million, then the “correct” number is $415 million…not “the numbers we believe currently represent the challenge”.
Finally, the Governor summarized the situation by saying, “We’re going to continue going down the path of dealing with it in a forthright, fair, and transparent manner.”
So just so we all have the same set of facts…
In the days leading up to this year’s election, the Malloy administration maintained their claim that the budget deficit was not more than $60 million.
Then in the course of two weeks it jumped to $128 million and then $365 million.
And just last week, when Malloy announced his $160 million in “budget cuts,” it turned out that he was double counting more than $40 million of those cuts and his action really reduced state spending by $123 million.
One can say a lot of things about the way the Malloy administration are handling the ongoing budget crisis, but “forthright, fair, and transparent” sure isn’t one of them.
You can find CTNewsjunkie’s story here: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/malloy_not_concerned_about_higher_deficit/
Ben Barnes (OPM Secretary), Budget Cuts, Kevin Lembo, Malloy, State Budget, State Deficit, State Legislature Ben Barnes, Kevin Lembo, Malloy, State Budget, State Deficit
When Governor Malloy proposed this year’s budget, the General Assembly passed it, and the Governor signed it into law, it was widely understood that the Malloy Administration had purposely underestimated the true costs of funding various programs, especially within the Department of Social Services.
Almost immediately, State Comptroller Kevin Lembo started warning the Malloy Administration that spending on social services would exceed what was authorized in the state budget.
Eventually, Ben Barnes, the Secretary of the Office of Policy and Management, admitted that the state might spend as much as $100 million more than authorized on these programs.
When the truth finally came out last week, the projected spending level is at least $191 million more than budgeted, although the federal government will reimburse the state for 50 percent of that amount.
This week, details about the $191 million in excess Medicaid spending were finally provided. The overspending includes;
$62.5 million in Acute Care Services (hospitalization)
$46.1 million in Professional Medical Care (doctors)
$25.9 million in Other Medical Services (lab work, treatment, medical supplies and equipment)
$13.0 million in Home and Community Based Services
$39.6 million in Nursing Home Facilities
$2.8 million in other Long Term Care
$1.0 million in Administration and Adjustments
In addition to the “optimistic assumptions,” there has been an increase in caseload, although the Malloy Administration’s attempt to blame the problem on increasing caseload is more than a bit disingenuous.
According to estimates from the independent Office of Fiscal Analysis, the number of Low Income Adults seeking services has grown by about 4,000 clients since the beginning of the fiscal year in July, a 5.0% increase. These additional clients represent an additional cost to the state of about $30.0 million.
In addition, the Malloy Administration had proposed a number of initiatives to reduce spending on Medicaid this year, most of which have yet to be implemented.
As part of Governor Malloy’s $132 million in cuts that he proposed yesterday, the Department of Social Services was hit for about $32 million. These cuts will force significant reductions in a variety of vital services starting in December and January.
Some of the more significant program cuts include the following;
Children’s Trust Fund $657,000
Husky B Insurance Program $1.5 million
Old Age Assistance $1.5 million
Aid to the Disabled $964,000
Temporary Assistance to Family (TANF) $5.3 million
Connecticut Home Care Program $2.3 million
Child Care Services (which is the child care subsidy for low-income WORKING PARENTS) $2.3 million *
*So, the cut could actually cost the state money if parents are forced to quit to take care of children
Housing/Homeless Services $2.9 million
Furthermore, the largest cut to the Department of Social Services is being made to the grant program to Connecticut hospitals to help them cover their uncompensated care. Malloy’s cut to these hospitals is for $13.4 million, which will certainly lead to health insurance premiums going up as hospitals try to stay in business by shifting even more costs to self-pay patients and those who are insured.
Ben Barnes (OPM Secretary), Budget Cuts, Kevin Lembo, Malloy, State Budget Ben Barnes, Malloy, State Deficit
You are reading that correctly – despite the Governor denying this reality 48 hours ago, Secretary of the Office of Policy and Management, Ben Barnes, is addressing a legislative committee today and will admit that the state budget deficit is at least $365 million dollars.
In the days leading up to the election, the Malloy Administration stuck to their claim that the state budget deficit was $60 million.
Just three days after the election, the number they’d admit too increased by another $50 million.
But as Keith Phaneuf wrote in the CTMirror, and as was reported here at Wait, What?, the true deficit was at least $300 to $350 million.
A state budget of $365 million is, as Phaneuf writes, “nearly double the level needed to compel Gov. Dannel P. Malloy to prepare a deficit-mitigation plan, according to written testimony from Malloy’s budget chief.”
Barnes’ told the Legislature that, “All told, these changes result in a projected deficit of $365 million.”
Barnes was silent on why the Malloy administration provided State Comptroller Kevin Lembo with different, and inappropriately more rosy numbers just days ago.
Check back tomorrow for some more information about the budget deficit and why the Malloy Administration might have worked so hard to keep the magnitude of the problem secret for as long as they could…
The CT Mirror, CTNewsjunkie and other media outlets have updated stories on the budget deficit. You can find the latest details about the ugly budget situation at the CTMirror http://www.ctmirror.org/story/18201/malloys-budget-chief-confirms-365m-deficit-testimony-legislature and at CTNewsjunkie: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/deficit_hits_365m/
Budget Cuts, Kevin Lembo, Malloy, Taxes Budget cuts, Malloy, State Budget
In this particular case it really is a double entendre…
Tomorrow, May 1st, 2012 – known as May Day in much of the rest of the world – will see the truth finally come out about Connecticut impending budget crisis and the price the rest of us will pay for Dan Malloy’s decision to coddle Connecticut’s super rich.
In the beginning, perhaps they actually thought that wishful thinking would be a sufficient force to correct the problem.
If the economy would only get better, Connecticut’s state budget would balance itself.
But months ago it was already clear that despite that wishful thinking, Connecticut’s budget was in deep trouble and the forecast for this fiscal year was grim and next year’s was disastrous.
However, instead of coming clean and providing the people of our state with the truth, the administration developed a complex set of half-truths and outright lies in order to ensure that few understood the mistakes that had been made and fewer still appreciated the magnitude of the budget hole that would, in time, appear.
Taking a page for George Orwell’s 1984, Ben Barnes, Malloy’s budget chief, along with the Governor and his primary advisers downplayed the problems hoping for – I don’t know what.
But like much in life, the march of time proved stronger than the political rhetoric.
Over the course of the next few days, Connecticut will finally learn the downside of an economic strategy based on the notion that if you protect the wealthiest among us, their largess with trickle down and fill our empty bowls.
Ben Barnes (OPM Secretary), Budget Cuts, Kevin Lembo, Malloy, SEBAC, State Legislature Malloy, State Budget
In less than ninety days, the state’s fiscal year (FY12) will come to an end. The day will mark the completion of Governor Malloy’s first fiscal year budget.
We sometimes forget that when Dan Malloy was sworn in as Governor Dannel Malloy back in January 2011, the state was functioning under a budget developed by Governor Rell and the Democrats in the Legislature.
It wasn’t until July 1, 2011 that Governor Malloy’s first state budget took effect. The “Fog of Time” probably clouds our recollection, but some will remember that Governor Malloy came into office facing an upcoming budget short-fall of more than $3 billion dollars.
After $1.5 million in new taxes, significant budgets cuts and a Malloy/SEBAC state employee agreement that included a wage freeze, changes in health benefits and a variety of other “projected cost savings”, the Legislature passed and the Governor signed into law a budget that purportedly contained a surplus.
Now with three months left in the fiscal year, Gov. Malloy and his budget chief, Ben Barnes, continue to hold on to their fantasy that the state presently has a small surplus.
Meanwhile, the General Assembly’s nonpartisan Office of Fiscal Analysis is predicting the state budget will end $120 million in the red – assuming that the Malloy administration follows through on its promise if allocate $75 million in a first step toward shifting the state to Generally Accepted Accounting Principles GAAP).
For the past nine months, Connecticut Comptroller Kevin P. Lembo has been in a difficult position. As Connecticut’s fiscal watchdog he has the obligation to put politics aside and report the actual state of affairs when it comes to Connecticut’s budget.
On the other hand, we’ve all seen that the Malloy administration is not only thin-skinned but quick to bully and assault anyone who criticizes them, even when the criticism is fair and accurate.
With that background, Lembo has done an impressive job giving Malloy’s budget projections the benefit of the doubt while still articulating the growing reality that will face Connecticut as the fiscal year comes to a close.
Truth be told, Connecticut’s state’s deficit would be significantly higher if it wasn’t for some handy budget gimmicks that the Malloy administration has been able to utilize including moving money from the last fiscal year into this fiscal year without having to go through the pesky appropriations process with all its transparency, procedures and votes.
Putting aside some “creative” spending strategies, Malloy, Lembo and the Democrats in both the Senate and House are looking to the April 15th tax deadline in the hope that income tax revenues will spike and the deficit will be erased, are at least won’t get worse.
As Lembo said in his press release, “all eyes are on April.” More