Budget Deficit Deepens
The state’s $20.14 billion budget for this fiscal year is now heading toward a deficit of $284.6 million, according to consensus revenue figures from the Office of Policy and Management and the nonpartisan Office of Fiscal Analysis.
Revenues have dipped by $112.8 million, and spending has increased by $47.4 million.
OPM Secretary Benjamin Barnes vowed, however, that the administration remains “committed to balancing the budget.”
Since the projected deficit is at least 1% of this year’s bottom line, the administration will have to submit a deficit-mitigating plan to the legislature. Barnes indicated the plan will include $222 million diverted from an account set aside to pay down state borrowing to cover a deficit in 2009.
The budget difficulty underscores the urgent need to continue to find cost savings in state government. Controlling state spending and improving efficiency in many aspects of government will help maintain vital public services in a sustainable way and avoid additional tax increases that hurt our economy.
One of those cost savings this year is the millions in budgeted dollars pegged to ideas from state employee unions’ suggestions–savings that were part of the agreement ensuring no additional state union-job layoffs. These cost-saving ideas are a critical component in balancing the budget.
The state should also intensely pursue its goal of rebalancing long-term healthcare to arrange for more people to be cared for at home versus institutional settings. While this is a long-term process, the potential savings are enormous and some progress could be made early next fiscal year.
Connecticut’s economy continues to struggle to create jobs. While the state unemployment rate has fallen to its lowest level in years, much of that is due to discouraged workers leaving the labor force.
Those factors are directly impacting the stream of state tax receipts. Achieving the state’s priorities and keeping state spending under control are critical issues impacting jobs and Connecticut’s competitiveness.
For more information, contact CBIA’s Pete Gioia at 860.244.1945 or email@example.com.
EXPLORE BY CATEGORY
Stay Connected with CBIA News Digests
The latest news and information delivered directly to your inbox.