State Budget Already In Red
by Christine Stuart | Aug 22, 2010 8:18pm
(7) Comments | Commenting has expired
Posted to: State Budget
Rosy projections over how much revenue Connecticut would receive from the federal government has thrown budget projections $63.4 million into the red less then two months into the new fiscal year.
Gov. M. Jodi Rell announced the bad news Friday when her budget office released its monthly letter to state Comptroller Nancy Wyman.
Connecticut’s share of federal Medicaid and education funding was $193.4 million less than state budget anticipated. However, the deficit comes despite an improvement in projected state income and sales tax collections. Income tax collections are up $127.5 million and sales tax collections are up $153.8 million.
“I will be working with my budget officials to erase the shortfall through administrative actions,” Rell said. “The fiscal year has barely begun and we have an opportunity – one we cannot afford to miss – to control this deficit before it grows unmanageable. I will be announcing the details of my budget-cutting plans soon.”
But despite the desire to cut, the expenditure side of the budget remains a challenge as the demand for services continues.
Expenses are currently projected to exceed the budget by $171.7 million, in part because of continued high demand for social services and in part because planned savings, such as $50 million in cost-cutting that is supposed to be achieved by the legislature’s Commission on Enhancing Agency Outcomes, has not materialized, Rell said.
Leaders in the Democratically-controlled legislature had a different take on the budget situation.
While acknowledging the decrease in federal revenues was disappointing Sen. President Donald Williams said the Rell administration has not done its part to find savings.
“Making matters worse the Rell administration has apparently given up on making $170 million in spending cuts,” Williams said Friday. “All of the savings from these cuts, much of them proposed by the governor herself, are included in the budget. Given the size of the state’s fiscal challenges, it is imperative that the Rell administration makes the difficult decisions necessary to reduce spending.”
As for the $50 million in savings expected from the legislature’s Commission on Enhancing Agency Outcomes, those numbers aren’t due until the end of the year, Williams said.
“We’re also disappointed that Gov. Rell is writing off $50 million in savings included in a legislative report that isn’t due until the end of the year,“ Williams said. “The bipartisan Commission on Enhancing Agency Outcomes submitted an initial report that identified opportunities for significant savings and we encourage the executive branch to aggressively pursue them.”
(7) Comments
posted by: mpalmer | August 23, 2010 9:55am
The Legislative branch enacts a budget.
The Executive branch implements the enacted budget.
Or not.
posted by: GoatBoyPHD | August 23, 2010 10:28am
The big problem remains: bad assumptions.
The 80s were noted by Reagan’s deficits that drove housing and investment returns. The 90s were noted by the peace dividend and dotcom and financial services boom that drove the economy. The early 2000s were noted for the positive hangover of housing equity and loose mortgage credit that drove the boom higher.
What if we return the 4% from 1957 to 1982 on the stock market instead of the 11% from 1982 to 2007? That’s the general estimate: a return to the mean which requires substandard returns for two decades.
Legislatures were able to blink and the problems were gone as the stock market appreciated 11% a year on average and housing appreciated 4.5% a year on average. Experts have the US earning closer to 3% a year on housing after we hit a bottom in 2012 or so and it will be a 2020 at best before we hit 2006 prices and that isn’t inflation adjusted.
The US Lost Decade. Pity the next Governor in 2015. By that time the Pension Mess and lackluster job growth will be pushing the crisis point.
posted by: City Hall Watch | August 23, 2010 1:38pm
Who is Don Williams kidding? Just once, I’d like to see Williams propose real cuts, substantial cuts to close the gap. Whine, whine, whine. This is the best he can do? This is all the vocabulary he possesses? God help CT. This is just lame.
posted by: CT Jim | August 23, 2010 1:59pm
Come on Palmer,
you took out the first part: THE EXECUTIVE BRANCH proposes a budget then the legislative branch tweaks it to the executive branches satisfaction then the executive branch will sign it.
If not it vetoes it.
There is little chance even with a so-called super majority to overide a Governors veto on a budget.
So please a little honesty here.
Thats like Newt Gingrich taken credit for Clintons budget. What a JOKE.
posted by: mpalmer | August 23, 2010 2:45pm
The point, for the moment, is that it is the Executive branch’s responsibility to implement a budget once enacted.
As to who proposes a budget, the Executive branch and each chamber propose budgets. It’s supposed to be a collaborative exercise, that is unless the Executive branch is more intrested in grandstanding…
posted by: JAM | August 23, 2010 9:05am
Williams says: “it is imperative that the Rell administration makes the difficult decisions necessary to reduce spending.”
Why didn’t the Legislature do this? Because these are “difficult decisions”? What nonsense.