Eleven days after Gov. Dannel P. Malloy ordered about $48 million in mid-year cuts to tackle a nearly $100-million shortfall in the current state budget, Comptroller Kevin Lembo (left) on Monday said that Connecticut has a lingering deficit of nearly $45 million.
Lembo’s announcement essentially confirms the need for Malloy’s current and planned spending reductions in the $20-billion operating budget that runs through June 30, 2015.
In all, Malloy 
(left, by Dixon)planned for nearly $55 million in cuts, but some of those are in the Legislative and Judicial branches, where he does not have budgetary control.
The deficit is mostly the result of $61.2 million in pending federal grants that have not arrived, including $25 million under the federal Affordable Care Act, Lembo said.
“The remainder of the shortfall resulted from delays in federal waivers sought by the Department of Mental Health and Addiction Services and from delayed implementation of adoptive and foster care initiatives,” Lembo said. “I am deeply concerned that this significant decline in federal revenue was not identified earlier in the fiscal year.”
Last month, Malloy cut $48 million from the state budget and asked the Judicial Branch to cut $6 million; and the Legislature to reduce spending by $865,000, to bring the total cuts to $54.6 million. The governor plans further reductions in January.
“A deficit of that size can be eliminated through continued active management of spending and an improving economy,” Lembo said. “Major economic indicators have been strengthening in recent months. I am hopeful that the upward trend continues and provides some additional budget relief.”
Benjamin Barnes (left, photo by Dixon), who as secretary of the state Office of Policy and Management is the governor’s budget chief, said Monday that Lembo’s projections are similar to last month’s estimated deficit of $99.5 million.
“The governor’s rescissions were just one part of our efforts to avoid a shortfall, as he said when they were issued any remaining shortfall would be eliminated by necessary management actions,” Barnes said in a statement.
“To that end, he had earlier sent a letter asking agencies to curtail hiring and limit other kinds of expenses,” Barnes recalled. “We believe these actions are sufficient to ensure that there will not be a deficit for the year ending June 30, 2015. Mr. Lembo’s concerns about federal revenue and the difficulty of accurately reporting the state’s fiscal position are right on the mark. The actions of federal agencies with respect to our shared obligations are a source of uncertainty which we will continue to manage and report on monthly.”