(Hartford Courant) Sen. Kane Comments on Hole in Gov. Malloy’s Budget

Article as it appeared in the Hartford Courant

The latest state budget numbers are out, and they show Connecticut facing deficits, now and in the future.

Two reports released Friday indicate that the state is running a deficit in the current fiscal year, and the problem will increase over the next three years.

The legislature’s nonpartisan Office of Fiscal Analysis placed the projected deficit in the current fiscal year at $89 million, while Gov. Dannel P. Malloy’s budget office estimated it at $99 million.

Malloy’s office emphasized that the projection would be at $99 million if no spending restraints were made, but Malloy ordered a statewide hiring freeze and spending cuts in a memo to state agency leaders Wednesday.

The legislature’s office said the projected deficit will be a combined $4.47 billion over the next three years, while Malloy’s office estimated it at $3.3 billion over three years.

Republicans immediately said that Malloy had downplayed the state’s budget problems during the recent election campaign against Republican challenger Tom Foley of Greenwich, which Malloy won by fewer than 30,000 votes out of more than 1 million cast.

During political debates, petitioning candidate Joseph Visconti complained multiple times that the deficits would be more than $4 billion over three years, but Malloy repeatedly said that the projections were based on an expected 7.8 percent annual increase in spending that he would not allow if re-elected.

Republicans complained that Malloy’s budget office recently said that there were no “deficiencies,” or overspending, by state agencies, while the nonpartisan fiscal office disagreed, saying before the election that there was $83 million in overspending.

“Everything was reportedly A-OK last month,” said Sen. Rob Kane, the ranking Republican senator on the budget-writing committee. “We were told there were literally no trouble spots in the budget. That raised my eyebrows and raised serious questions. How could everything have been so perfect? Well, it turns out things weren’t perfect. We are running a deficit.”

The incoming Senate Republican leader, Len Fasano of North Haven, said, “Things were rosy before the election, and now all of a sudden we have a problem? The timing of these announcements raises serious questions. It doesn’t pass the smell test.”

Malloy’s budget director, Ben Barnes, said that state officials are already taking actions to control spending and reduce the deficit.

“This is consistent with what the administration has been saying — that no matter what the projections are, we will manage and administer the budget so that there will be no deficit,” Barnes said. “It is important to remember that this is a prediction of what would happen now and in the future should we do nothing, and doing nothing is not an option.

“Raising taxes is not an option, either. Any budget issues will be resolved by prudent decision-making and difficult choices, should they be necessary.”

The state budget problems have been generating increased attention in recent days. On Wednesday, Barnes told agency heads in a three-page memo to rein in spending immediately because estimated revenues were coming in $59 million below the levels set in the budget for the current fiscal year.

During the election campaign, Malloy pledged to avoid raising taxes if elected to another four-year term. In 2011, Malloy and the legislature passed the largest tax increase in state history at more than $1.5 billion. When the state income tax was created in 1991, the tax increase that year was $1.1 billion.

The two budget offices made their projections Friday as part of the annual Fiscal Accountability Report that is required by state law.