HARTFORD, Conn. (CBSNewYork/AP) – Connecticut’s budget deficit has ballooned even further and may continue to increase, the state’s comptroller has warned.
Comptroller Kevin Lembo now puts the shortfall at $415 million due to lower than expected revenues and overspending in Medicaid and social services.
WCBS 880 Connecticut Bureau Chief Fran Schneidau reports
Lembo also warned that the cost to clean up from superstorm Sandy is expected to widen the budget gap.
“I went out of my way to couch this projection of $415 million as ‘at least,’” Lembo told WCBS 880 Connecticut Bureau Chief Fran Schneidau.
Though the state’s sales tax was raised, revenue has not been flowing in as projected, said Lembo.
“There are certain assumptions made in a budget package and you try to forecast out where you will be on revenue and spending and that calculation did not hold,” Lembo told Schneidau.
Another prediction that Lembo said did not hold was his estimation on corporate taxes.
A spokesman said Gov. Dannel Malloy disagrees with the comptroller’s deficit projection, saying it is about 12 percent too high.
Just last week, Malloy issued immediate cuts amounting to $170 million after his state budget director put the budget deficit at $365 million.
Lembo said the difference in the estimations is due to calculations of higher education spending.
Officials said much of the deficit in this year’s $20 billion budget is due to higher-than-expected Medicaid costs.
Lembo also sent a letter to Malloy on Monday saying the deficit exceeds one percent of total general fund appropriations, a benchmark that requires the governor to submit a deficit-reduction plan to lawmakers within 30 days.
Malloy last week announced $170 million in spending cuts across state agencies and is putting together a plan to deal with the rest of the deficit. State lawmakers are expected to take up the shortfall during a special session at the end of the month.
Three weeks ago, Malloy’s budget director, OPM Secretary Benjamin Barnes, confirmed a $365 million deficit. He attributed it to the lackluster national and regional economies, years of deferring Connecticut’s long-term liabilities such as pension costs and a fast-growing demand for public services such as Medicaid health care coverage.
Malloy senior adviser Roy Occhiogrosso said Monday that administration officials disagree with Lembo’s estimate.
“However, the governor, comptroller and it seems legislators all agree there is a current year shortfall that needs to be addressed before the end of the calendar year,” Occhiogrosso said. “The deficit mitigation plan the governor will propose within the next couple of weeks will, based on the best available data at the time, bring the current year budget into balance.”
Connecticut GOP chairman Jerry Labriola Jr. said the projection is the latest evidence of what he called Malloy’s “gross mismanagement” of the state’s finances.
“With the current fiscal year deficit at $415 million and climbing and next year’s deficit projected at more than $1 billion dollars, it is clear that the economic policies of Governor Malloy have been an utter failure,” Labriola said in a statement.
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