Budget Deficit Continues to Grow And Grow
by Christine Stuart | January 21, 2009 7:31 AM
Posted to State Capitol
After a meeting with her economic advisers, Gov. M. Jodi Rell warned that the state’s budget forecast, which is already grim, was getting grimmer Tuesday.
Rell’s budget office predicted a $921.7 million shortfall for fiscal year 2009.
“Every economic indicator has deteriorated over the last two months,” Rell said during a press conference at the Learning Corridor in Hartford.
Estimated quarterly income tax payments fell 20 percent below projections, corporate tax payments are $100 million below projections, and sales tax collections are running $50 million behind projections.
“This economy stands to get worse before it gets better,” Don Klepper-Smith, one of Rell’s economic advisers, said. The state has already lost 13,000 jobs and he estimates by the end of the year it could increase to 60,000 to 80,000. “Some of those jobs on Wall Street are not coming back,” he said.
When asked how negotiations were going with the state’s unions, Rell’s Budget Secretary Robert Genuario said they’ve had a meeting and have another scheduled, but that talks have not progressed to a point where he has anything he can report.
There are an estimated 10 to 11 union contracts set to expire by the end of the fiscal year.
Genuario said the administration has instructed all state departments to review their Medicaid filings to see if it may be able to identify any additional money in that account.
Rell said there’s been some indication that there may be some additional Medicaid assistance from the Obama administration in fiscal year 2009.
Rell will give her budget address on Feb. 4 for fiscal years 2010 and 2011 and is expected to produce another budget mitigation plan to deal with the more than $900 million budget deficit in fiscal year 2009.
Sen. Majority Leader Martin Looney, D-New Haven, said “The new budget estimate is a new call for action. We must continue to work with Gov. Rell to tackle the deficit and it should be done without partisan finger-pointing and posturing.”
“Gov. Rell didn’t create this problem and neither did the General Assembly, but it is our responsibility to guide Connecticut through this difficult time,” Looney said in a press release.
Comments (7)
Posted by: Mike | January 21, 2009 12:33 PM
Do Not Raise Taxes!!!!!!!
Cut Spending!!!!!!!!
Posted by: ctkeith | January 21, 2009 1:56 PM
Mike,
If you're making over 150 grand anually both your state and federal income taxes are going up over the next couple of years whatever state you choose to live in.
If you're not willing to accept that I suggest the only state you'll be comfortable in is the state of denial.
Posted by: cedarhillresident![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| January 21, 2009 2:29 PM
LOONEY FOR MAYOR!!!!!!
Sorry had to get that off my chest :)
Posted by: Jerry | January 21, 2009 4:26 PM
To CTKeith,
If you don't think the State Gov't should cut spending, you are living in a dream world. CT like many other states has decided to fund programs that are no longer effective and no ones looks at this. Budgets are a "last year Plus a increase" in many departments. The budgets are so large that it is difficult to get staff to perform proper scrunity. We need some legislation that says something to the effect that every 5th year the increase for the state budget will be "0"
Posted by: Authentic Connecticut Republican | January 21, 2009 6:26 PM
Reduce a few targeted taxes and we could realize substantial revenue gains.
Diesel:
Our last increase resulted in a net loss of revenue and no less interstate trucks - they just don't buy fuel here from our retailers anymore.
Cigarette:
With a population only 4 or 500,000 bigger than ours, So. Carolina sells over 30 million cartons a year vs our 12+ million.
Further, 60% of the cigarettes consumed in the greater Boston market area carry a New Hampshire tax stamp.
We should address the huge, rich NYC market thusly:
A reduction of $5.00 per-carton here would bring the price spread to the require 20+% vs surrounding targeted states (RI, NY) to accomplish substantial product movement; resulting in greater revenues for both our tax dept and our Connecticut retailers who will in turn wind up paying higher income tax thanks to the prosperity of their enterprises.
Posted by: ctkeith | January 21, 2009 7:15 PM
Jerry,
I'm sure ther is plenty to be cut and plenty will be cut but after all the cutting is done there will still be a need to raise revenue which means a tax increase.
The people of this state and this country voted for Obama in a landslide after he spent 2 years promising to raise taxes on those making over 150,000. Even Politicians,who use to get petrified by silly comments like Mikes,now know they can just laugh them off.
Posted by: Authentic Connecticut Republican | January 21, 2009 10:08 PM
>>need to raise revenue which means a tax increase.
Kindly cite a tax increase, any tax increase that delivered the expected revenues.
It's never happened.
No one's suggesting we reduce across the board; but we forever fail to notice our logistical position as it regards surrounding states with even higher taxes than our own - and we fail to capitalize on that situation.
Why?
Do we feel that we owe New York something?
Would we be considered "rude" if we took advantage of their high taxes and thus captured some of their retail dollars?
Lower prices for our citizens coupled with a revenue stream of higher velocity, resulting in higher profits for our retailers and some increased employment opportunities - simply makes sense.