Current Budget Deficit Growing, Next Year in Big Trouble [WTNH]

March 31, 2015


HARTFORD, Conn. (WTNH) — The state budget deficit has grown again, and is more than three times worse than the Governor’s office said last month. The next two years are looking even worse as lawmakers appear to be balking at many of the spending cuts the Governor has proposed.

The Governor says he is not advocating for any tax hikes, but there is a lot of talk about them and other methods of raising revenue. The majority Democrats in the General Assembly are expected to meet in a closed door meeting next week to discuss the grim reality of the $3 billion budget deficit projection for the next two years.

The Governor distanced himself from the proposals that have been floating around the capitol for a week, like an increase in income tax rates on the wealthy, a new, higher tax on Capital Gains, plus a huge boost in the cigarette tax.

“I’m not advocating for any tax hikes, let’s be very clear,” said Governor Malloy. When asked where the money will come from to solve all that red ink, the Governor replied, “Well then you have to cut expenses.”

It’s becoming increasingly clear that many state lawmakers do not have the stomach for some of the deep cuts Malloy has proposed, and even Republican leaders say he’s cutting in the wrong places.

“The cuts that we make to social service programs at the Department of Children and Families and the Department of Social Services are bad policy,” said Senator Len Fasano, R-North Haven, the new minority leader in the state Senate. “We need to look at these, but there are other factors that we could trim the budget where there’s fat.”

An important legislative committee has given the green light to putting tolls at the state borders and another committee has given the green light to an expansion of gambling, but neither of these is expected to help with the deficits.

The Governor is sloughing off the latest predictions for the current budget year showing the red ink approaching $200 million with just three months left.

When asked if he now thinks he painted too rosy a picture during the campaign about the budget prospects the Governor replied, “No, I don’t. I think reality is that we have to go to June 30th to understand where we actually finish.”

Many people do file their state tax returns late, so money from the income tax keeps coming in after April 15. Last year that closed a predicted deficit, but that will not solve the problem of the next two years.