Cafero Sounds The Alarm Bells Over Lagging Revenue
House Minority Leader Lawrence Cafero believed the decision to delay the October revenue estimates until after the November election was a purely political move, so he asked the nonpartisan Office of Fiscal Analysis to give him its estimates early.
The Office of Fiscal Analysis and the Office of Policy and Management sit down three times a year and come to a consensus on the state’s revenue estimates. The estimates are released in January, April and October, but this summer the legislature voted to change the mid-October reporting period to Nov. 10.
For the past two years the numbers have been reported in October, but Democratic lawmakers said it made more sense to wait until November when they had more financial information to include in the report.
Finance Committee Co-Chairwoman Rep. Patricia Widlitz said during debate in June that the move had nothing to do with the election. Widlitz said the consensus revenue estimates were pushed back so the state would have a more up-to-date financial picture at its annual fiscal accountability meeting, which takes place between Nov. 15 and Nov. 30.
“The intent was to give us a more accurate picture with more accurate information than we had on October 15,” Widlitz said at the time.
But Cafero believes the numbers already prove his point that despite the second largest tax hike in the state’s history—the state could end the year in a deficit.
According to the OFA report prepared for Cafero this week, revenues are down about $71.6 million from projections. From Indian gaming revenue to sales tax revenues are lagging behind projections.
“Unless otherwise noted, these FY 13 revenue adjustments would continue into the out years, resulting in a net reduction to the General Fund revenue base of approximately $20.8 million annually for each of FY 14 - FY 16,” the OFA report states.
“We cannot ignore what is going on,“ Cafero said. “That is how we got into trouble in the first place. If we are facing another huge deficit we are going to have to act as soon as possible to fix this.”
Roy Occhiogrosso, Gov. Dannel P. Malloy’s senior communications adviser, said it’s the Republicans not the Democrats playing politics with the numbers.
“The closer we get to Election Day, the more desperate the Republicans become,” Occhiogrosso said Thursday. “The more desperate they become, the more heated their rhetoric becomes. The more heated the rhetoric the more they play fast and loose with the facts.“
“They should probably just take a deep breath and begin coming up with the excuses they’ll need to explain away another failed campaign season,” he added.
Cafero maintains he’s simply dealing with the reality of the numbers and this has nothing to do with election year politics. After all the legislation requiring the estimates to be prepared was implemented three years ago by a Democrat-controlled legislature as a check on the executive branch, which at the time was controlled by a Republican.
“Despite all assurances from the Democrats and Gov. Malloy that we could tax our way out of the previous deficit, Connecticut’s budget remains structurally broken because we continue to spend more money than we take in,“ Cafero said. “Until we address that basic fact we will run deficits.”