Barnes: 2016 Budget Is Back In The Red - $141.1M
Connecticut’s 2016 budget is back in the red, according to Malloy administration budget director Ben Barnes.
In his monthly letter to state Comptroller Kevin Lembo, Barnes said the state’s revenues have slipped again and the budget is experiencing a $141.1 million shortfall. That’s just three weeks after the General Assembly closed a $220 million budget gap.
“The question is no longer whether we’re in a new economic reality, it’s what we’re going to do about it,” Malloy said in a statement accompanying the numbers. “Today’s projections make clear that we can’t wait and hope that future revenue projections will save us from making tough decisions. We need to solve our whole fiscal problem, and not with Band-Aid solutions like using the Rainy Day Fund for next year’s problem.”
Democratic legislative leaders have decided they won’t be meeting with Malloy to discuss cuts to the 2017 budget, which is more than $900 million in deficit, until they get more accurate revenue estimates next week.
The fact that the 2016 budget is back in deficit is not exactly a surprise. With a little over $400 million in the Rainy Day Fund, it’s expected the General Assembly will use that to cover the 2016 deficit, according to sources.
According to Barnes letter, revenues have slipped $95 million since last month. The biggest portion of that is attributed to a decrease in the corporation tax. They adjusted revenues from licenses and fees downward by $10 million.
“Revenue performance through the remainder of the fiscal year — particularly over the balance of the month of April — will be the most important factor in determining year-end results,” Barnes wrote in his letter.
Republican legislative leaders — Senate Minority Leader Len Fasano and House Minority Leader Themis Klarides — said they are “disappointed” in the projections, but not necessarily surprised.
They said it’s frustrating to hear Democratic legislative leaders still saying revenue projections could improve.
They said this is why the state needs to “implement long-term structural changes to restore predictability and stability to our budget.” They said the state needs to fix the problem at hand, “but we also have to shift the direction of our policies for the long-term.”
Senate President Martin Looney, D-New Haven, said they will balance the 2016 and 2017 budget before they adjourn on May 4.
“The continued volatility of our revenue demonstrates the need to have the most complete budget picture as we work toward finalizing a $920 million plan to address Connecticut’s long-term budget needs,” Looney said. “We are determined to vote on a comprehensive package before the adjournment of the General Assembly.”