“This is not a deficit…It’s a shortfall” – Governor Malloy 11-15-2012

No, this is not a segment on the Daily Show, although it is certainly worthy of what Jon Stewart and his team of award winning writers come up with.

Let’s take a step back, a deep breath and try this again…

What we do know is that Connecticut is facing a “fiscal problem.”

The Governor proposed, the Legislature passed and the Governor signed a state budget into law.

Now, state revenue is coming in below what was projected.

And state expenditures are higher than what was projected.

Those two developments create a problem.  For now let’s call the problem a “gap.”

On November 1, 2012 the Malloy Administration said the gap was $60 million dollars.

In the days after the election, the Malloy Administration said the gap was actually bigger than $60 million.

At first they said that revenue had dropped by about $52 million from a report that was released last April.  However, the state budget that passed and was signed into law wasn’t based on the report that they were referencing, but instead, it was based on the amount of revenue in the report plus an additional $75 million in revenue.

So while revenue was $52 million below the April Report, it was actually $128 million below the budget.

But before people get too confused about the $52 million versus the $128 million, they can rest assured that neither number was an accurate description of the size of the gap.

That is because the real gap, at the time, was over $300 million.

To make a long story shorter, the Malloy Administration then admitted that this year’s real gap was $365 million.

And then, the next day, they admitted that the gap was $365 million for this year and $1.1 billion for next year.

Perhaps most impressive is that fact that all of this occurred between November 1 and November 15, which, by the way, is sometimes called a fortnight.

And then Governor Malloy spoke to the media, and as report in various media, including the Hartford Courant, we learned that, “Malloy refused to use the word “deficit” and instead said the current situation is a “shortfall.”

The Courant story added, “’This is not a deficit,’ Malloy told reporters Thursday at the state Capitol. ‘It’s a shortfall.’”

Now some, including House Republican leader Larry Cafero, have been speaking out about these developments.

Cafero told the Courant and others, “For the governor to come out with a press release using the figure $52 million is wrong. At worst, it’s deceiving and deceitful. Where does he get $52 million when the report itself says $128 million?”

Representative Cafero went on to tell reporters, “For the governor to put out a press release on $52 million is the least transparent, most deceitful thing I’ve seen…”

When asked about the accuracy of Mr. Cafero’s comments, Governor Malloy responded…

“He’s wrong. Representative Cafero has expressed his desire to become governor of the state of Connecticut. You folks are going to have to get used to putting everything in context, and I’m sure that that will appear in your papers every time you report what he has to say. Having said that, he’s wrong. I don’t know how else to say it.  The data is the data.  The data becomes available when it’s available.”

While we are discussing semantics, we should probably add that the Connecticut Constitution and state laws require that the state go out and borrow the funds necessary should it end the fiscal year in the red, often referred to as a deficit.

So if we want to be really technical, Connecticut can have a projected deficit but it can’t have a real deficit because a real deficit would mean that the State ended the year in the red, which would trigger the state going out to borrow money to fund that shortfall, which means there would no longer be a gap, shortfall or deficit.

I’m not sure if that strengthens or weakens the positions taken by Governor Malloy and Representative Cafero, but I’d hate to see us squander much more time talking about whether the gap is really a deficit or a shortfall.

Finally, as to Governor Malloy’s observation that ” The data becomes available when it’s available,” considering I’m not trained in quantum physics, I simply don’t feel qualified to comment on his observation.