By now you may have heard the state is facing a 'gloom and doom' budget: $365 million deficit in this fiscal year and an estimated $3 billion in the hole through fiscal year 2016.
How did this happen?
The budget was enacted just four months ago, but already there has been a decrease of money coming into the state and over runs.
- People are not buying goods, so money the state usually collects through the sales tax is less than expected.
- Taxes collected through a corporation tax and money collected from the state's two casinos is also less than expected.
- Medicaid costs over by $260 million
- Personal expenses salaries and over time for some state workers over by $10 million
A November revenue report by the Office of Policy and Management and the Office of Fiscal Analysis (the state's number crunchers) has resulted in the projected gap.
With these projections, the current deficit is now estimated at $365 million.
This is a large jump from the previously projected deficit by the administration of $61.0 million on November 1.
It is very disturbing that we would see such a large jump in a matter of two weeks, which is why there will be pressure by lawmakers in Hartford to get answers from the administration. Why are we just now learning of these bad numbers?
I can report to you that in December the Comptroller of the state is expected to issue a letter signaling that by statute a series of actions must take place.
In light of the enormous budget gap the administration has to put together a plan to fix the problem. This plan can include among many items cuts in spending and cuts in programs.
We should however, look at reducing spending. For quite some time I have argued the state has a spending problem, not a revenue problem.
It is never easy to report bad news to constituents, but it is my duty.
Please rest assured we will make sure to keep the pressure on. You deserve a transparent government that works for you.