$60 Million Error Is Found in Connecticut Governor’s Budget Proposal [NYTimes]

February 25, 2015

Article as it appeared in the New York Times

Less than a week after unveiling his spending plan to lawmakers, Gov. Dannel P. Malloy of Connecticut learned that because of an accounting error, his budget had exceeded the state’s spending limit by $60 million.

Benjamin Barnes, secretary of the Office of Policy and Management, who is responsible for advising the governor on financial and policy matters, said on Tuesday that his office had miscalculated the spending cap for 2016.

Mr. Barnes said his office would work to bring the budget into line with state law. “On behalf of the agency, I personally apologize for this discrepancy,” he said.

Mr. Malloy, a Democrat in his second term, proposed a nearly $40 billion, two-year spending plan last week to the state legislature. In his speech, he emphasized that Connecticut was living within its means, and that his fiscal plan would have the state “living within our spending cap.” About $20 billion of that plan was scheduled for use in 2016.

Connecticut law limits the rate by which state spending can increase from one year to the next. Budget planners use personal income data to calculate the allowable increase in each year’s spending plan.

The budget presented last week should have allowed for a spending cap growth rate of 2.58 percent, Mr. Barnes explained in his statement. Budget analysts inadvertently used numbers from the wrong period to determine the spending limit, starting in the fourth quarter of 2008 rather than the third quarter. That analysis produced an erroneous growth rate of 2.98 percent for 2016, which translated into $60 million the state is not allowed to spend.

The 2017 budget comes in $80 million under the spending limit, Mr. Barnes said.

The mistake was discovered by the legislature’s Office of Fiscal Analysis, officials said.

The State Senate minority leader, Len Fasano, a Republican from North Haven, said the state’s spending cap, passed in 1991, was created to prevent spending more than taxpayers could afford. “If this isn’t a red flag, I don’t know what is,” Mr. Fasano said in a statement. “The state has a substantial spending problem.”