Here’s the release that just came over from Comptroller Nancy Wyman, predicting nasty things to continue in budget land. What it means is a special session, soon, to cut state spending or – if Democrats continue their budget shell games – rearrange deckchairs on the Titanic. Wyman’s release is followed by the governor’s, one from Senate Minority Leader John McKinney, R-Fairfield and another from Senate Majority Leader Martin M. Looney, D-New Haven.
State Comptroller Nancy Wyman today projected the state will end the
2010 fiscal year with a budget deficit of $624 million, mainly due to
continued weak receipts of the income tax.
projection of the Governor’s budget office.
end of the fiscal year, my projection takes into account the
accelerating job losses, high unemployment and decline in personal
income that Connecticut residents are seeing now and can expect to see
in the near future,” Wyman said.
by investors and others based on their estimated year-end income,
including annual bonuses. Those payments were down 29 percent in
September.
Total revenue for the year so far is down by $407.6 million. That is
more than double the revenue drop that would trigger the cancellation of
a planned one-half percent reduction in the sales tax that was approved
by the General Assembly in its 2010 budget.
The Governor’s latest estimate put the total revenue shortfall at
$172.1 million, which by a margin of $1.6 million would enable the sales
tax reduction to take effect in January.
“I wish I had better news about the revenues and the implications for
a sales tax cut,” Wyman said, “but my projection is based on actual
tax collections and underlying economic trends that cannot be
ignored.”
Beside the revenue shortfall, deficiencies in state agency budgets
added another $212.5 million to Wyman’s deficit estimate.
-END-
Governor Rell’s Statement on Budget Deficit
“The Legislature’s budget contained numerous structural deficiencies that have begun revealing themselves in the analyses from both OPM and the Comptroller. It is significant and troubling to have such high deficit estimates so early in the fiscal year – which again points to the need for prompt action. While we may disagree on the specific estimates, we should all agree that we cannot wait for the regular Legislative session to take remedial measures.
“I have already conducted several meetings with the Office of Policy and Management over the last week and am preparing a deficit mitigation plan, which will be submitted within the statutory timeframe. I am also prepared to exercise my authority to begin making rescissions perhaps as early as this week.”
“Just two months ago, Democrats, in the face of Republican warnings and without a single Republican vote, passed a partisan budget that, according to the Democrat Comptroller, is now $624 million in deficit. The Comptroller has also questioned the state’s ability to realize another $473.3 million in unspecified savings.
“The last time we faced a deficit of this magnitude, Democrats ignored Republican warnings and the State ended up borrowing $1 billion to close the FY09 deficit, increasing debt service and mortgaging our future. We cannot continue to repeat past mistakes.
“Republican leaders again stand ready, willing and able to work with Democrats to finally do the difficult, but necessary work to reduce the size and cost of state government. We need the Democrat majority to stop ignoring reality and join us at the table.”
Senate Majority Leader Martin Looney (D-New Haven)
“The new budget estimate from State Comptroller Nancy Wyman is of great concern and shows that Connecticut continues to face the same economic challenges affecting so many other states.”
“Connecticut is getting hit with a powerful one-two punch right now. Not only do revenues continue to drop, but the governor is failing to make the spending cuts called for in the budget. As the Comptroller states, about one third of the deficit is due to increased spending in the executive branch.
It is critical that the governor not only follow through on cuts included in the budget, but also begin responsibly exercising her rescission authority. We remain committed to working with the governor to deal with this continuing economic crisis and look forward to receiving her deficit mitigation plan.”
