Deficit Grows to Nearly $1 Billion

The deficit for this fiscal year has grown to $922 million according to the latest estimates. Revenue is way, way down. Said Sen. Martin Looney, Majority Leader:

“The latest projected deficit for the current fiscal year is a direct result of the global economic crisis landing on Connecticut’s doorstep. Gov. Rell didn’t create this problem and neither did the General Assembly, but it is our responsibility to guide Connecticut through this difficult time.
[…]
We believe it is vital to protect funding for certain programs which, if eliminated, would exacerbate the economic crisis facing Connecticut families. Funding that helps small businesses grow, keeps bio-medical researchers working, and encourages energy conservation has been protected – for now.

The new budget estimate is a new call for action. We must continue to work with Gov. Rell to tackle the deficit and it should be done without partisan finger-pointing and posturing.”

The governor will prepare another mitigation plan, to be presented after the 2010-11 budget in February.

Interesting Bills

From yesterday, some interesting proposed bills.

First, several legislators want to tax plastic bags.

Larry Cafero wants to include an employment impact statement with every bill on employment.

Cafero also wants the legislative bodies of towns/cities to be able to intervene in binding arbitration.

Weirdly, Sen. Doyle wants to exempt Pilates instruction from the sales tax. That’s… specific.

Sen. Prague wants to repeal the in-school suspension mandate. Good idea.

Sen. Debicella wants budget surpluses to be used only to increase the amount of exempted income for state income tax purposes, reduce state long-term debt and fund the Budget Reserve Fund.

Rep. Robles wants to install traffic safety cameras.

Rep. Floren thinks towns should be able to limit the number of polling places for a primary.

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12 responses to “Deficit Grows to Nearly $1 Billion

  1. If the deficit is currently $922 million, then is the YTD budget down around $1.5 billion?

    Anyone care to speculate on the over / under for:

    the day when they finally close the 08/09 budget gap?

    the day they adopt the next two year budget?

    the day the rainy day fund fully evaporates?

    I’m think the rainy day fund may disappear entirely before June 30… and they won’t even have responsibly addressed the current year budget.

  2. ModerateDem08

    The $922 million is the total so basically the legislature needs to address another $325 or $350 million. Don’t be surprised if this goes over a billion before the fiscal year ends. If it is not addressed by the legislature, a sizable portion of the Budget Reserve Account will have to be be depleted, leaving less for next year. This will be problematic since the trend is to underestimate the deficit, which does not bode well for the taxpayers of Connecticut. IMO the $2.6 and 3.3. billion projected deficits for the next two fiscal years are quite low. Put your helmet on, we are in for a wild ride.

  3. ModerateDem08

    Predictions:
    Close budget gap – June 30, 2009
    Adopt two year budget- mid-September 2009
    Rainy Day Fund Evaporates – June 30, 2010.

  4. the day the rainy day fund fully evaporates?

    2 PM this afternoon, give or take 15 minutes.

    I’m think the rainy day fund may disappear entirely before June 30… and they won’t even have responsibly addressed the current year budget.

    I susect it’s already history as a practical matter

  5. The $922 million is the total so basically the legislature needs to address another $325 or $350 million.

    Actually, the $922M is NET of the prior recissions and adjustments. Add together the $190M in recissions, the $180M in mitigation from November and this last go-around of $130M yields a total deficit for this year (so far) of $1.422B. This year’s budget however was paid for, in part, by carrying over approx. $550M of the 08 surplus. The State is basically $2B in the hole for current year expenditures over current year income.

  6. For those that believe tax increase are the way to, please think about what the 25% reduction in IT Revenue implies. Namely that Connecticut residents’ income is down a comparable amount and raising taxes on shrinking is probably the least fair and most harmful way to go.
    IMO these new numbers set up a serious cash crunch coming head on. With Income tax Refunds coming due just over the horizon, the situation could get very messy if they’re short on cash.

  7. What does “Your comment is awaiting moderation” mean?

  8. We believe it is vital to protect funding for certain programs which, if eliminated, would exacerbate the economic crisis facing Connecticut families. Funding that helps small businesses grow, keeps bio-medical researchers working, and encourages energy conservation has been protected – for now.

    This seems to imply that without these state government programs, small businesses wouldn’t grow, bio-med researchers wouldn’t work, and there wouldn’t be energy conservation.

    If small businesses cannot grow without some government program that requires taking taxes from everyone else, maybe these small businesses aren’t really viable. If bio-medical researchers cannot work without government assistance from other taxpayers, maybe they aren’t really doing necessary work?

    Now, there are some things that government needs to do to make sure that businesses can function. The government has to provide police protection, it has to rule on contract disputes, it has to provide infrastructure such as rails and roads (and it needs to plow these roads and maintain them) so people can go to work. Is that what this guy is talking about? Or is some sort of grant to keep these people doing stuff that the private sector would ordinarily not pay for? How much money do we have to pay to each bio-medical worker from the state coffers to get them to stay here and work? Is it worth it?

  9. Now, there are some things that government needs to do to make sure that businesses can function. The government has to provide police protection, it has to rule on contract disputes, it has to provide infrastructure such as rails and roads (and it needs to plow these roads and maintain them) so people can go to work. Is that what this guy is talking about? Or is some sort of grant to keep these people doing stuff that the private sector would ordinarily not pay for? How much money do we have to pay to each bio-medical worker from the state coffers to get them to stay here and work? Is it worth it?

    GMR, you’ve got it right. These guys, however, believe they are the economy and the private sector is beholden to them.

  10. Sen. Prague wants to repeal the in-school suspension mandate. Good idea.

    Why?

  11. For those that believe tax increase are the way to, please think about what the 25% reduction in IT Revenue implies. Namely that Connecticut residents’ income is down a comparable amount and raising taxes on shrinking is probably the least fair and most harmful way to go.
    IMO these new numbers set up a serious cash crunch coming head on. With Income tax Refunds coming due just over the horizon, the situation could get very messy if they’re short on cash.

    I agree that increasing the Income Tax is a bad idea when income is down so much. The only thing worse is to push the State’s budget woes down to the municipal level and put pressure on Property Tax, which is a Wealth Tax.

    It seems that Doyle has some selective taste – could SB110 help explain why he looks so buff? Perhaps if a “Barber” bill is introduced, maybe someone will help him with his cowlick problem.

  12. Doyle probably meant “pilots training”, but simply got the spelling wrong….

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