Pressure Rises to Plug State’s Budget Gap

Solving Connecticut’s budget gap this year continues to be a moving—and bigger—target, with the latest projection showing a $518.4 million deficit. This week, Gov. Rell issued a new plan to fill the gap she said “is only likely to grow” because of the struggling economy.

Sen. President Don Williams (D-Brooklyn) also said quick action was necessary to find a budget solution and “to grow and protect jobs—something that has a direct impact on tax revenues—and the deficit.” He said he would work with the governor and other lawmakers on reviewing her plan and solving the crisis.

Contained in the governor’s latest plan are some state spending cuts, using about $220 million  from the Rainy Day Fund that had been allocated for 2011, postponing $100 million in contributions to the state employee pension fund,  $45 in additional federal stimulus funds and the return of a hospital gross earnings tax.

The legislature has to take action on the budget gap and lawmakers will make their own recommendations before final negotiations with the governor. However, the rapidly approaching end of the fiscal year could limit the options available to policymakers.

Right around the corner is another huge gap projected for next year ($700 million), followed by a multibillion-dollar gap in the next biennium.

CBIA believes the urgency at the Capitol about the situation, along with the recognition that Connecticut has to focus on economic growth and jobs, is key to the state’s economic recovery.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.