Red Ink Continues To Flow
by Christine Stuart | Feb 1, 2010 9:22pm
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Posted to: State Budget
State Comptroller Nancy Wyman pegged the state’s budget deficit at $515 million, an increase of $1.7 million over the past month.
The deficit is greater than 1 percent of the budget, which means Gov. M. Jodi Rell needs to submit another deficit mitigation plan.
Wyman reminded Rell in this letter that the December deficit mitigation plan she proposed was not implemented, so the “current deficit triggers the requirement for a second mitigation plan.”
“As I have noted previously, since Fiscal Year 2008 the state has been running structural deficits with planned spending exceeding expected revenue,“ Wyman said. “While the economic downturn exacerbated the budget imbalance, the state was facing deficits even in the absence of a recession.”
Weak income tax collections due to job losses continue to drive revenues down.
The state is down 94,500 payroll jobs from the peak reached in March 2008. The job losses and associated declining personal income is felt across many revenue categories, most notably the sales tax, Wyman wrote in her monthly letter to Gov. M. Jodi Rell.
“Sales tax revenues were budgeted to decline 4.6 percent from last year. Receipts were actually down 7.3 percent through December,“ Wyman added.
The only major revenue category exceeding budget expectations is federal grants, which is running $42.2 million over budget, Wyman said.
The state is also overspending its budget by about $193.7 million. Most of that overspending, about $125 million, is being done by the Department of Social Services “where required savings have not been attained,” Wyman said.
Rell will unveil her budget adjustments Wednesday during her last State of the State address.
posted by: dmcoxe | February 2, 2010 8:45am
Why do I feel like the state is a sinking ship and all our leaders can do is argue over who is going to start bailing out the water?