Fasano: Gov. Lamont Fails to Issue Complete Deficit Mitigation Plan

Administration’s dangerous “wait-and-see” strategy dodges a difficult conversation

Senate Republican Leader Len Fasano (R-North Haven) is questioning why Governor Ned Lamont is failing to issue a complete deficit mitigation plan today as required under state law. The Governor’s plan released today only addresses $200 million out of the $2 billion deficit, and assumes taking over $1.8 billion from the rainy day fund (Budget Reserve Fund) to close the remainder of the shortfall. State statute requires that when the comptroller certifies a shortfall in the General Fund in excess of 1% the governor musts present lawmakers with a deficit mitigation plan within one month “to modify such allotments to the extent necessary to prevent a deficit.” Today is the deadline for that submission.

“The Governor’s administration is failing in its responsibility and using a dangerous ‘wait-and-see’ strategy to avoid a difficult conversation. The law is clear that when faced with the current budget problems, the governor must present a true deficit mitigation plan ‘to modify such allotments to the extent necessary to prevent a deficit.’ What the governor’s administration put forward today does not meet that requirement. It is incomplete. By only using 4% of his rescission authority, the governor is creating a self-fulfilling prophesy that will put our state in a position where we have to take a significant amount from the rainy day fund. We may end up needing to rely on the fund in part, but we should only do that once we have taken all steps necessary to get our fiscal house in order. Today’s partial mitigation package shows an administration resigned to taking from the rainy day fund not out of necessity, but to avoid making tough decisions.

“The deficit this year may only be $2 billion on paper today, but we know that number is likely far greater. It does not include additional expenditures that may come up, such as UConn’s request for more financial assistance, and it also assumes savings from yet to be achieved lapses. In addition, we are anticipating deficits of over $3.5 billion next fiscal year and at least another $3.5 billion shortfall the year after.

“The reason the Budget Reserve Fund has reached historic levels is because of the policies Republicans advocated for and worked with Democrat lawmakers to include in the bipartisan budget approved in 2017. The Budget Reserve Fund can and should be an important level of support during these unprecedented times. But we cannot rely on it as a panacea. It makes sense to use this fund to make investments in our state that will reduce debt, result in economic development and grow jobs – which is what Republicans have proposed using these funds for in the past. Using the fund to simply plug budget holes as a one time revenue source is what Gov. Malloy and Democrat lawmakers did in the past and what has failed our state repeatedly. Assuming this early in the fiscal year that one were to use the rainy day fund to address a budget shortfall or wait for more federal funding is dangerous and shortsighted.”