While lower gas prices are being celebrated by consumers, it’s becoming a huge headache for the Malloy administration.
The state’s incredible inflating budget deficit has risen to nearly $121 million for the fiscal year that ends June 30, prompting Ben Barnes, secretary of the Office of Policy and Management yesterday, in a letter to Comptroller Kevin Lembo, to promise imminent budget cuts to balance the state’s precarious budget. The shortfall in gas taxes has forced a transfer of nearly $19 million from the General Fund into the Special Transportation Fund for infrastructure projects. In November, under a deficit then projected at $100 million, Gov. Dannel P. Malloy ordered tens of millions of dollars in spending cuts recisions with promises of more in the new year. The new year is here, in spades.
An additional fall off of $89.3 million in anticipated revenue is the main culprit for the most-recent increase in the deficit, including a $25 million lose in oil company revenue and a $50 million deficiency in Medicaid programming awaiting federal reimbursement. In addition to taxes at the gas pump, Connecticut also taxes wholesale sales of petroleum products. While the drop-off in revenue was reported last week, the full budgetary impact was estimated only at about $70 million in the nearly $20 billion budget. The General Assembly is in session to craft a new two-year spending plan that will take effect July 1.
Senate Minoryt Leader Len Fasano, R-North Haven, in response to the announcement, said that planned savings have not been achieved by the governor.
“This was a problem yesterday, and it is an even bigger problem today. I just don’t get it. Is there simply an inability to talk to Republicans?” he said in a statement. “Every day that goes by without bipartisan action is a step in the wrong direction. But we cannot change direction until state leaders open up their doors and work across the aisle to weed out the problem, reprioritize spending, and identify a long-term solution. When it comes to state finances, everyone is disheartened by the perpetual bad news. So let’s work together to fix the problem here and now.”