GOP lawmakers accuse Malloy of lowballing deficit [JI]

November 24, 2014

Journal Inquirer
Republican state lawmakers on Friday accused Gov. Dannel P. Malloy of understating projections for the state’s budget deficit and asked that he call a special session of the legislature to deal with the budget problem by mid December.

Senate Minority Leader-elect Leonard Fasano and House Minority Leader Themis Klarides sent a letter Friday to Malloy saying they believe the shortfall could reach $198.3 million.

The governor must seek legislative approval of action to balance the budget when a shortfall reaches 1 percent of the $1.75 billion general fund portion of the budget, or $175 million.

Malloy’s Office of Policy and Management has projected the deficit at $99.5 million, a figure Deputy Secretary Karen K. Buffkin reiterated during a presentation Friday to the legislature’s Appropriations and Finance committees.

The legislature’s non-partisan Office of Fiscal Analysis, meanwhile, put the figure at $89.1 million.

But Klarides and Fasano point in their letter to discrepancies between the OFA and OPM estimates.

OFA’s projected deficits of $10 million for the cost of healthcare, $31.8 million for retiree health care, $1.5 million in state employee health costs, and $10.5 million for the Correction Department. But Malloy’s budget office didn’t cite any of those deficiencies.

Projections not ‘on same page?’

“It doesn’t seem that everyone’s on the same page,” Klarides, a member of the Appropriations Committee, said Friday.

Republicans also questioned Democrats’ expectation of $45 million in tax revenue needed to reach a budgeted goal of $75 million in miscellaneous taxes. They cited all those figures in reaching their $198.3 million estimate of the deficit.

If the budget shortfall exceeds 1 percent of the general fund allocation, the governor is required to come up with a formal budget mitigation plan.

The plan then needs legislative approval, and Klarides and Fasano asked that a special session of the legislature be held by Dec. 15 for that purpose.
State Rep. Pamela Z. Sawyer, R-Bolton, agreed that that if such a measure is required, the special session should be held before newly elected legislators take office in early January.

“This is this year’s budget, and the new seated members will be dealing with a two-year projected complicated mess, and I wouldn’t want to see this year’s shortfall not have its day in the sunshine,” said Sawyer, who didn’t seek re-election.

But Malloy spokesman Andrew Doba said there is “no need” for a special session because actions already taken will address the deficit.

“The rescissions that were announced yesterday, in addition to management measures that were announced more than a week ago, are more than sufficient to address this minor shortfall,” he said.

Standing by estimates

OFA director Alan Calandro also said he didn’t think the deficit would reach a level requiring such action, despite the disagreement with OPM on the figures.

Buffkin agreed that a combination of $54.6 million in budget rescissions, a freeze on the hiring of non-essential state employees, and limits on contracts will close the projected shortfall.

The cuts include $48 million in agencies under Malloy’s control, as well as requests for nearly $7 million from the legislature, judicial branch, and watchdog agencies.

Buffkin also said OPM expects savings elsewhere in the budget to counter some of the deficiencies cited by OPM. She presented OPM’s report because Secretary Benjamin Barnes was sick and didn’t attend the joint meeting of the two legislative committees.

Fasano also strongly criticized Malloy’s decision to cut $9.2 million earmarked for the state Department of Children and Families, including $6.3 million to house and care for children.

But Beth Bye, D-West Hartford, who is chairwoman of the Appropriations Committee, blasted Fasano because Republican lawmakers proposed a similar budget cut in April.

“I know all legislators are concerned about children in DCF care, but I think it’s a bit disingenuous to be criticizing a cut to a program that Republicans themselves proposed cutting six months ago,” she said.

OPM defended the cut by saying the state is sending fewer children to group homes.

DCF policies questioned

But Bye questioned the policy decisions and procedures that have led to the drop.

She also said many of the children will eventually need to go to group homes, but the funding cut could lead to closure of homes.

Buffkin found herself defending the timing of the deficit projection after Sen. Robert Kane, R-Waterford, asked how OPM could go from predicting a $300,000 surplus on Oct. 20 to forecasting a $99.1-million shortfall less than a month later.

Buffkin said the October projection was based on information available at the time, but a meeting with OFA to find a consensus on revenue resulted in the two departments agreeing that state revenue would be nearly $60 million less than budgeted.

Other Republicans on the two committees raised concerns Friday about the state’s fiscal habits, pointing both to the current budget and to OPM’s projections of a $1.17 billion deficit in the 2016 fiscal year and $1.12 billion the following year.

OFA has projected a combined deficit of nearly $2.8 billion over that same time span.

But Democrats said the shortfall is less than 1 percent of the current budget, echoing Malloy’s statements throughout the week.

Buffkin said Malloy’s budget proposal for the next legislative session probably will include spending cuts. She promised that it will be balanced and will meet Malloy’s campaign pledge not to raise taxes.

“The governor will present a budget that is balanced, under the spending cap, and does not rely on new taxes,” she said.