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Lawmakers, Malloy grapple with nearly $300M deficit

Ben Barnes (left) and Mark Ojakian  (Photo by Christine Stuart)
Ben Barnes (left) and Mark Ojakian (Photo by Christine Stuart)

HARTFORD, Conn. –After budget analysts counted up all the revenue Wednesday, they discovered next year’s budget falls nearly $300 million short of where analysts anticipated it would be at the beginning of the year.

Budget analysts concluded that the state will end this fiscal year with a $43.3 million surplus, which is about $462 million short of the $505 million surplus it predicted in January. The fiscal year 2015 budget was based January revenue estimates which ended up being poor predictors of Connecticut’s fiscal future. That means lawmakers will be left to plug a nearly $300 million hole.

The dive in revenue numbers was related mostly to the fact that income tax revenue wasn’t as robust as predicted. Corporation taxes were revised downward by $44.2 million and sales tax projections were revised downward by $22.6 million. The Malloy administration is attributing the decline in sales taxes to “the impact of this winter’s weather and certain federal policy efforts.”

“We believe this is due to several tax law changes at the federal level at the beginning of calendar year 2013. These tax law chances made it advantageous for investors to realize capital gains in 2012, likely resulting in a significant decline in such realization in 2013,” Office of Policy and Management Secretary Ben Barnes said in a memo.

See the complete story at CT News Junkie.

Comments

10 responses to “Lawmakers, Malloy grapple with nearly $300M deficit”

  1. John Hamlin

    Blame the Feds? Blame the weather? Come on folks — blame the politicians who can’t figure out what the governor and politicians of Wisconsin and other states have figured out. We don’t have a revenue problem, we have a spending problem — and the dominance of the public employee unions is a big part of the problem. The state needs some fiscal sanity. We keep electing the wrong people.

  2. Don’t Panic

    Unbelievable. A $43 million surplus is headlined as a $300 million deficit. Its a smaller surplus, not a deficit.

  3. the donut hole

    If you think we’ll end up $43 million in the black, I have bridge to sell you.
    .
    Hey at least we’re not racking up the credit card to pay for all of this. What? Oh? Ok, Bush’s fault. Let’s stick with that.

  4. Piberman

    Democrats should be proud of their Governor’s continuing ability to keep CT as the nation’s most prominent poster child for irresponsible fiscal finance. No doubt Norwalk Democrat leaders will have to work even harder to give Gov Malloy a large majority in the coming election. After all when it comes to spending birth the Governor and Norwalk Democrats are on the same page -more us always better.

  5. Oldtimer

    For the projections to be off by $300 million is hardly news. That shrinks the projected surplus, it does not create a $300 million deficit. The folks that are calling it a deficit have no business criticizing the governor’s arithmetic.

  6. the donut hole

    The governor’s method of accounting for expenses would land a CFO and CEO in prison. He promised GAAP based accounting when he campaigned. What is going on right is an extreme departure from GAAP that will result in a qualified audit opinion and likely another downgrade in credit rating for the state. That will in turn increase interest expense dramatically for all the debt that Malloy has racked up to pay for his shopping spree.

  7. Bill

    Malloy has got to go. This guy is in over his head. Malloy, putting public unions first and tax payers and businesses second.

  8. Don’t Panic

    @oldtimer,
    So true. Gov Malloy moves the state onto GAAP for the first time ever, takes on all of the budgetary problems that are unearthed–manages to pull out a surplus in the process–and the so-called fiscal conservatives are still calling for his head.
    .
    Stunning, isn’t it?

  9. the donut hole

    Don’t Panic obviously can’t tell the difference between GAAP and the GAP. Not recording expenses in the period in which they happen is actually a fraud. The IRS could and has seized assets from individuals and businesses for this type of activity. Executives have gone to prison for similar like at Enron and MCI. Wearing rose colored glasses is one thing. Being completely ignorant about what is happening to your state finances is hazardous to all of our livelihoods. Wake up man.

  10. Don’t Panic

    Just curious. Which expenses are we not booking as incurred?

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