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Nonpartisan Analysts Predict $2.8 Billion Budget Deficit for 2016-17

by Christine Stuart | May 29, 2014 12:56pm
(7) Comments | Commenting has expired
Posted to: Election 2014, State Budget, Taxes, State Capitol

No matter who the voters elect or re-elect to the governor’s office in November, they will inherit what’s projected to be a two-year, $2.8 billion budget deficit, according to the nonpartisan Office of Fiscal Analysis.

That’s still a smaller number than the one-year, $3.67 billion deficit inherited in 2011 by Democratic Gov. Dannel P. Malloy, but Republican gubernatorial candidates say it shows how little progress the state has made getting its fiscal house in order.

“I’m willing to concede that Malloy inherited a $3.6 billion deficit, if he’s willing to concede to a $2.8 billion deficit over the biennium,” Sen. Minority Leader John McKinney said Thursday.

McKinney, one of three candidates vying for the Republican nomination for governor, said that if the Malloy administration wants to talk about the problems it inherited, then it’s going to have to talk about the ones it’s leaving.

Comparing apples to apples, the one-year deficit projection following the end of former Gov. M. Jodi Rell’s term was $3.67 billion. The one-year deficit projection following the end of Malloy’s first term is $1.278 billion, which is about a third of the deficit the state faced in 2011.

Malloy, who is running for re-election and polling poorly on his handling of the budget, certainly doesn’t want that to be the narrative. He has repeatedly refused to acknowledge the deficit projections.

“I don’t care what the number is,” Malloy has said.

Ben Barnes, Malloy’s budget director, has said it’s not accurate to report future deficits for spending that hasn’t occurred.

“There’s no budget in place for any year after fiscal 2015,” Barnes told reporters in April. “There’s no such thing, in my view, as a deficit or a surplus in years in which there is no appropriation in place.”

If that logic is applied to before Malloy took office, it would mean he did not inherit a $3.67 billion deficit.

“Um,” Barnes replied. “Eh. I don’t want to say that.” 

Andrew Doba, a spokesman for Malloy’s administration, said Thursday that the Malloy administration has proven time and again that it can manage the bottom line.

“Where other administrations have failed to curb growth, Governor Malloy has held the line on spending, limiting it to under 2.8 percent,” Doba said.

He said the chart below shows that the average rate of growth during the Malloy administration was lower than the average over the past decade.

“Look at our rate of growth compared with the 10-year average of revenues — well within balance,” Doba said.

In addition, Doba pointed out that the Republican budget proposal in response to Malloy’s this past session had deficits into the future. Republicans argue that it wasn’t a full budget proposal and not a fair comparison.

Meanwhile, Republican gubernatorial candidates say Malloy can’t claim he actually balanced the budget based on the number of gimmicks he employed in order to get there — gimmicks that he swore he would never use when he was a candidate in 2010.

The current fiscal year 2015 budget passed this month by the legislature includes $75 million in delinquent tax collections and doesn’t include $50 million in health insurance benefits for newly retired state employees.

In a last-minute effort to balance the budget, the Democrat-controlled legislature estimated that it would receive $75 million in back taxes from individuals and businesses who owe back taxes. It also failed to heed the advice of state Comptroller Kevin Lembo who suggested it include $50 million in retiree health benefits for a number of Correction officers eligible to retire.

Barnes has said he doesn’t believe, based on the current economy, any of the Correction officers will be retiring.

McKinney, who pointed to the last-minute addition and subtraction to the budget as just two examples of gimmicks, said that even after the second largest tax increase in the state’s history, the budget is “structurally unsound.”

Foley, who lost to Malloy by 6,404 votes in 2010, said he feels not much has changed over the past four years.

“I said in 2010 that Connecticut has a spending problem, not a revenue problem,” Foley said Thursday. “. . . Governor Malloy’s fiscal policies have hurt the economy, killed jobs and squandered taxpayers’ hard-earned money. I call again for Ben Barnes’ resignation and for the governor to abandon his reckless and irresponsible management of the state’s budget.”

Danbury Mayor Mark Boughton there’s no denying the next governor is going to be staring down a budget deficit and the person who gets elected will have a tough four years ahead of him.

“There’s been a certain amount of kicking the can down the road,” Boughton said.

That’s mostly because a deficit was handled with an increase in spending, he said.

He said the state needs to have a serious conversation about how much government it needs and which services should be provided by the state or the municipalities.

“It’s a discussion that’s long overdue,” Boughton said.

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(7) Comments

posted by: lkulmann | May 29, 2014  2:12pm

I am excited about this budget because I have been able to really study the budget and find some areas that money can be diverted back into the Social Service programs. I’m hoping to be a part of that discussion to share my ideas…of course I will be advocating for updated services and supports for the disabled…that will become a legal battle that I’m willing to fight no doubt…any takers O.O

posted by: ocoandasoc | May 29, 2014  2:17pm

What happened to the surplus?
Seriously, though, a better way to look at this would be to state that Gov. Malloy inherited a $3.7 billion deficit, enacted a massive tax increase (the biggest tax hike in CT’s history), and still has a $2.8 billion deficit,  yet promises no more tax hikes if he’s re-elected.  Of course, he doesn’t tell us how he’ll manage to balance the budgets for the next four years without one… but CT voters are used to these kinds of empty promises.
BTW, it’s really unfair to blame either Rell or Malloy for the deficits. The blame lies with the Democrat-controlled State legislature over the last eight years, and regardless of who winds up as Governor he’ll have to deal with this group of socially progressive but financially irresponsible part-time policymakers for the next four years.

posted by: dano860 | May 29, 2014  2:20pm

Oh come on!
I thought he borrowed our way out of debt, ya know, we’re at GAAP, right?
Sorry, I was just dreaming or may have just twisted up a fatty, as HST would say.

posted by: DirtyJobsGUy | May 29, 2014  3:44pm

What a low standard we set for our political class!  Like small children making excuses they argue about who had the bigger deficit.  How about treating this realistically and plan for a surplus?  Even a Progressive could stand up and say the economy stinks and we need drastic action with haircuts by everyone (except the taxpayer who already got sheared last time)

posted by: Noteworthy | May 29, 2014  3:51pm

Somebody better tell the governor he has no clothes.

His rationale for not recognizing the projected budget is juvenile and really rather stupid. His state of denial or dishonesty is like a spousal victim of an adulterous affair refusing to believe such a thing can happen until she finds the still warm panties at the foot of the marital bed while she has been ignoring the third toothbrush and somebody else’s makeup in the bathroom.

posted by: Joebigjoe | May 29, 2014  7:39pm

Money for the disabled I am all for. Let’s start by taking some from the people ripping off the system, that are fully capable.

posted by: Common Sense | May 30, 2014  8:20pm

If Malloy is reelected—this projected massive deficit fugure will increase drastically.  The voters better wise up on Election Day, or the fiscal sellout will continue and lead our state to oblivion.