Malloy Looks To Rainy Day Fund To Close 2015 Deficit [News Junkie]

June 22, 2015

CT News Junkie
Despite several rounds of rescissions and offers of help from Republican lawmakers, Gov. Dannel P. Malloy’s budget office announced Friday that the state would use part of the rainy day fund to close the 2015 deficit.

The deficit, according to Office of Policy and Management Secretary Ben Barnes, is $115.7 million.

In his letter to State Comptroller Kevin Lembo, Barnes wrote that any deficit would be “extinguished” with a transfer of funds from the rainy day fund. There is currently $519 million in the rainy day fund.

June’s deficit projection is lower than in previous months because the state realized an additional $44 million in corporation taxes that it hadn’t projected. The health provider tax also brought in an additional $10 million. But personal income tax is still down by $35 million “due primarily to weaker than anticipated estimated payments,” Barnes wrote in his monthly letter to Lembo.

Senate Republican Leader Len Fasano was critical of the deficit.

“I’ve said it before and I’ll say it again: Governor Malloy’s hesitation has led to devastation,” Fasano said in a statement. “This is exactly what we have been warning the governor about. Taking a ‘wait and see’ approach to closing an imminent and growing deficit is not leadership. Turning a blind eye to the reality of a problem only makes that problem worsen.”

Malloy has repeatedly said the deficit would disappear as the economy improved and pointed out that the state collects taxes for 2015 up until the end of August.

“There won’t be a deficit and there won’t be tax increases. I’m taking that pledge when I couldn’t take it before because this is a budget that I own and I’m willing to own,” Malloy said in September during the campaign.

Republican lawmakers offered to help Malloy mitigate the 2015 budget, but Malloy let them know early on he wasn’t interested.

“Governor Malloy has chosen to live in his fantasy land of no deficits,” Fasano said. “He has said repeatedly that ‘there won’t be a deficit.’ But there is a deficit. It is here, it is now, and it is real. Even with the fund sweeps in the governor’s budget, the deficit still stands.”