Barnes Plans For ‘Every Eventuality’
by Christine Stuart | Nov 14, 2012 6:30am
(5) Comments | Commenting has expired
Posted to: State Budget, Taxes
When revenue estimates fell behind by more than $128 million last week Republican lawmakers called upon Democratic Gov. Dannel P. Malloy to sharpen his pencil and get to work on a deficit mitigation plan.
By law, Malloy does not need to offer a deficit mitigation plan to the legislature until state Comptroller Kevin Lembo certifies a deficit that’s equal to 1 percent of the approximately $20 billion state budget. That means Malloy doesn’t have to offer a plan until the state deficit grows to about $200 million.
On Monday, Malloy told the Courant that it was “premature” to be talking about a deficit mitigation plan. However, Ben Barnes, his budget director, suggested Tuesday that one may already be in the works.
“We certainly intend to offer a deficit mitigation plan as it’s required by law,” Barnes said Tuesday. “It seems likely that we will.”
Prior to attending a meeting on education funding, Barnes said his office is “preparing for every eventuality.”
The state’s fiscal picture will become more clear on Thursday when Barnes and the Office of Fiscal Analysis release their annual “Fiscal Accountability” report.
Barnes said the ongoing economic recovery doesn’t look like previous economic recoveries. Revenue projections continue to trend downward and it’s been four years since the global financial crisis hit back in March 2008.
“It’s unheard of in Connecticut’s modern economic history to see four years after the triggering event of the recession to not be seeing normal recovery-type growth,“ Barnes said.
Malloy is taking an optimistic approach to the budget situation.
He continues to say that because President Barack Obama was re-elected, Connecticut’s citizens likely will account for their income in this fiscal year as opposed to next fiscal year because of the uncertainty surrounding the Bush tax cuts. That means more residents will be paying income and dividend taxes to the state before the end of the year.
Also, with Obama at the helm the state stands a greater chance of receiving at least the same amount of Medicaid money next year as it did this year.
“We’re going to do whatever it takes to balance the budget,” Malloy told the Courant after a luncheon with Chris Matthews and Ted Kennedy Jr.
Malloy will release his two-year state budget in February. It’s unclear at the moment whether he would offer a deficit mitigation plan before the beginning of the year, if Lembo doesn’t certify a $200 million deficit on Dec. 1.
Tags: Ben Barnes, deficit mitigation, Gov. Dannel P. Malloy, fiscal accountability, dh
(5) Comments
posted by: BMS | November 14, 2012 1:23pm
As the Governor can not layoff employees to save money. It may be time to have an early retirement incentive for state employees.
posted by: johnnyb | November 14, 2012 1:42pm
Here’s a suggestion for Ben, there are still 2 years of no layoffs for union employees. Offer a 3 year/chip early out to state employees and eliminate the stupidly high penalty for employees who leave before age 60(tier II’s)so that people that want to leave can do so. This will open up jobs for younger people that can be refilled at starting wages. You also could then stream line your over staffed supervisory workforce if they take the early out so that there is less 3 to 1 ratio’s of supervisor to worker situations. Trying to balance the budget with cuts in supplies isn’t going to work.
posted by: paid-my-dues | November 14, 2012 3:05pm
An early retirement in some fashion would be a immediate solution,as was in the past by the state.Often used by carefully well run municipalities and instituted by the corporate for profit world in times of real cost reduction and savings.I am sure it would be well received,having employees retire earlier than planned at a lesser rate for the long term.A win/win.
posted by: JamesBronsdon | November 14, 2012 3:37pm
“Barnes said the ongoing economic recovery doesn’t look like previous economic recoveries. Revenue projections continue to trend downward and it’s been four years since the global financial crisis hit back in March 2008.”
I doubt there are more than a handful of states in the same boat as us. (California is a whole different level of pathology.) Golly, I wonder if there’s any connection between downward trending revenue projections and our fiscal policies.
posted by: ConnVoter | November 14, 2012 6:33pm
Anyone with a brain could see that the Governor’s taxing and spending plans would fail miserably. This deficit was entirely expected to those of us who have brains, as it is very clear that you cannot tax your way out of recessions and that only economic growth (not rate hikes) leads to more revenue.
Unfortunately, no one in Hartford has a brain, which is why this all came as a surprise, and Washington is desperately trying to do the same thing. How stupid are we, really? We’re all cooked.