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Lembo Certifies $131.1M Budget Deficit

by Christine Stuart | Mar 1, 2013 12:30pm
(7) Comments | Commenting has expired
Posted to: State Budget

State Comptroller Kevin Lembo believes the state’s current budget deficit is bigger than both the legislature’s Office of Fiscal Analysis and the governor’s budget office.

On Friday, Lembo certified a $131.3 million deficit, which is about $9 million lower than the one he certified at the beginning of February.

Earlier this week the legislature’s Office of Fiscal Analysis pegged this year’s deficit at $128 million and the governor’s Office of Policy and Management estimated that it was $55.7 million.

In Friday’s letter to Gov. Dannel P. Malloy, Lembo said that he continues to agree with the revenue forecast, although the spending trend that he is using is about $75.6 million above estimates by the governor’s budget office. The primary difference falls within the Medicaid appropriations where caseloads continue to exceed expectations.

“The slow growth in the national economy has created increasing demand for state services while at the same time producing lower revenue collections,” Lembo wrote. “Traditionally, even after the national economy improves, there is a lag before the state budget realizes the full benefit of the general economic improvement.”

Lembo and Office of Policy and Management Secretary Ben Barnes may not agree on the size of the deficit, but they agree on the importance of April.

“April is a significant month for income tax collections, and recent federal tax changes combined with favorable market performance could result in a shift of capital gains revenue from future years to the current budget year,” Lembo said. “This would improve the present budget forecast, so my office will continue to modify these projections based on actual experience.

Barnes noted that only about half of the income tax for the year has been collected to date, which makes April the most significant month for income tax collections. Barnes anticipated that Connecticut could do well in April.

“Changes in taxpayer behavior due to the federal fiscal cliff may result in potential one-time gains in those April collections,” he said in his Feb. 20 letter to Lembo.

But at the moment the economy continues to recover at a slower pace than originally forecast, Lembo said.

The state lost 1,800 jobs in December and the unemployment rate remains at 8.6 percent.

“Just under one quarter of the jobs lost to recession have been recovered to date,” Lembo said. “Connecticut’s unemployment rate remains historically high at 8.6 percent; the national rate was also disappointing at 7.9 percent in January.”

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(7) Comments

posted by: Noteworthy | March 1, 2013  1:09pm

Thank you Gov. Malloy. You’re doing a heckofa job. That’s with more than a billion of dollars in new taxes this year; almost $3 billion in two. Remarkable.

posted by: JAM | March 1, 2013  1:54pm

Wouldn’t a large portion of capital gains realized in 2012 in anticipation of higher taxes in 2013 ( the Fiscal Cliff Effect) be due in January estimated payments?
And the fact that there was no significant negative market impact in December suggest there wasn’t a lot of selling back then?
I think all this talk about a Fiscal Cliff windfall is a lot of wishful thinking, and an excuse for not addressing the current budget’s problems now.

posted by: dano860 | March 2, 2013  9:57am

On a local radio program on Friday, Senator Tony Guglielmo ( R) (Stafford Springs) stated that they have never looked for reductions in the budget.
Senator Don Williams (D) ( Brooklyn) claims they need MORE revenue (taxes) to serve the State. The State is the largest employer in the State and they can’t find savings?
Something is really wrong when you just look at only UCONN and their salary structure. I have been into the operations side of the place and I know for a fact that waste is a problem.
Workers are riding all over and nobody has an idea what they are doing.
Now they are getting another 5% increase in tuition.
Working for the State is “workfare”. It is time to get some continuous improvement application to these ill run operations.

posted by: GoatBoyPHD | March 2, 2013  3:48pm

GoatBoyPHD

Then there’s the sequester and the added $50 million or so there. And the next fiscal cliff at the end of the month.

posted by: lkulmann | March 2, 2013  6:08pm

Its interesting how CT State has brainwashed middle income taxpayers into an automatic assumption that taxes have to go up when the budget is not balanced. Isn’t it time to expect better?  President Obama made it crystal clear that the wealthy and well connected refuse to close loopholes which allows them to avoid paying their share of taxes. Loopholes loopholes loopholes. What the heck is a loophole? President Obama has asked the low income and middle income population to demand the wealthy close loopholes to help make the economic recovery quicker and less painful for the disadvantaged population. Congress dug their heels in deep and refused to give up some of their luxurious comforts to help us poor folk. The only way to get their attention is a direct hit to their wallets. I found a petition on the presidents website that basically demands cooperation from Congress or suffer the consequences of wage, benefit and job loss if they don’t do their jobs. Imagine? Congressmen and women getting suspended for not doing their job! This petition gives a little bump of reality that they have their jobs because we elected them. They need to hear our disappointment in their job performance to the tune of 100,000 signatures. Expect better. Check it out!

posted by: ASTANVET | March 3, 2013  1:48pm

Dano860 - you have no idea how right you are.  A look at UCONN specifically reveals their bloat in the middle management areas throughout the campus.  The way UCONN has always dealt with a cut in their budget has been at the custodian level - but they will pay administrators (not professors) HUGE salaries.  Where are the priorities of UCONN - if it is to attract the best and brightest, surely they are not going to say that these administrative staffers are the answer for that.  As for Infrastructure costs, didn’t we just spend a couple billion dollars on the UCONN 2000 initiative to turn it into a pedestrian campus?  now they want a couple more billion dollars for more infrastructure?  Are you kidding me?  It occurs to me that UCONN was much better when it was just a State University - where State residents could get a quality education.  Now it is a bloated business!

posted by: Joebigjoe | March 3, 2013  5:03pm

At the Federal level Michael Bloomberg just gave an interview where he talked about how the debt isnt a big issue and we can continue to borrow.

If that’s the case then why the hell do they keep raising my taxes?

I think Williams and some of the other people have gone to the Bloomberg School of Economics. It’s all about this unlimited supply of money that seems to exist either between creating money on a computer, borrowing money, or stealing money from hard working Americans.