Legislators Told To Prepare For Special Session Before Christmas On $365 Million Deficit

by Categorized: Brendan Sharkey, General Assembly, Gov. Dannel Malloy Date:

State legislators have been told to prepare for a special session before Christmas to deal with the state\’s growing financial problems, sources said Friday.

\"\"The House Democratic caucus has been told by still-House Speaker Chris Donovan and incoming Speaker Brendan Sharkey to set aside the week of December 17 for a possible session.

Republicans have been calling for a special session, saying that Gov. Dannel P. Malloy must submit a deficit-mitigation plan under state law because the projected deficit is more than 1 percent of the state\’s general fund.

The General Assembly had been expected to remain in recess until the full, regular session starts in early January. But the problems with the state budget have grown large enough to merit the attention of the legislature.

The state is facing a projected deficit of $365 million in the current fiscal year that ends on June 30. Malloy retains certain powers in cutting small parts of the budget, but any large cuts must be approved by the state legislature.

Senator Rob Kane, the ranking Republican on the budget-writing appropriations committee, said he is not optimistic that Malloy and the Democratic-controlled legislature will cut $365 million in spending to cover the deficit.

\”I’m just fearful that all they’ll do is borrow again, like they did a few years ago,\’\’ Kane told Capitol Watch. \”That kicks the can down the road even further. We put together a budget [in the Republican caucus] that had zero taxes. This legislature chose to go the opposite way with the biggest tax increase in state history. It just proves you can’t tax your way to prosperity.\’\’

Regarding Malloy\’s comment Thursday that the state is facing a \”shortfall\’\’ instead of a deficit, Kane said, \”That is really funny in my mind. … It’s a deficit. Let’s face it. Let’s stop sugar-coating it. Let’s tell people the truth.’’

Kane added, \”Last week, he said to talk about a deficit was premature. He’s looking for one-shot deals – wasn’t that what red-light cameras and Sunday sales were? They’re all revenue grabs with no real gumption to cut spending. In 2010, candidate Malloy said he’d only raise taxes as a last resort, and we got the largest tax increase in state history. He painted himself as a moderate, and I thought he would come to us and say this legislature is so far left. Instead, he pushed his policies even farther left. I don’t believe he has the ability or the willingness to cut spending.’’

Kane questions whether spending will be cut because he says that Malloy has no demonstrated history of reducing spending.

“We felt that he was a moderate or, dare I say,  a conservative Democrat,\’\’ Kane said. \”In fact, it turned out the other way.’’

In response to Kane, Malloy\’s senior advisor, Roy Occhiogrosso, said, \”Tell him to relax. The governor understands the nature of the problem. The governor is committed to Connecticut living within its means. It will not require new taxes. Tell him that everything will be fine. He’s running around like his hair is on fire.’’

Occhiogrosso added, \”The governor will submit a deficit mitgiation plan some time in the next couple of weeks that will eliminate the shortfall.’’

Concerning the criticism, Occhiogrosso said, “If the Republicans are still smarting from the results of the election, we get it. They’re angry. They’re sensitive. … The people understand that we have some real challenges, but we’ve made some progress. The Republicans can run around and yell and scream. That will not fix the problem. The governor will provide steady, calm leadership.\’\’

Since the exact schedule is not yet set, some questions still remained about the special session. One insider said Friday that it would be \”probably a long day\’\’ if the session can be completed in one day.

With some lawmakers out of town, the legislature is not expected to meet during the week of Christmas.

Besides facing a projected deficit of $365 million in the current fiscal year, the state is facing another deficit of $1.18 billion in the next fiscal year – according to the latest financial statistics. The red ink would continue for another two years after that – at more than $900 million per year.

The state\’s tax collections are lower than expected, despite tax increases totaling $1.5 billion, including those on income, retail sales, corporations, estates, electric power plants, alcohol, cigars and cigarettes. Malloy\’s budget increased taxes on more than 50 items in different categories, including charging sales tax for the first time on previously tax-free items such as nonprescription drugs, clothing and shoes under $50, pet grooming, automotive towing, manicures and pedicures. The tax on retail sales increased to 6.35 percent, while the maximum rate on the state income tax increased to 6.7 percent for those with the highest incomes.

Despite the numbers, Malloy refused to use the word \”deficit\’\’ and instead said the current situation is a \”shortfall.\’\’

\”This is not a deficit,\’\’ Malloy told reporters Thursday at the state Capitol. \”It\’s a shortfall.\’\’

Since last week, House Republican leader Larry Cafero has been blasting Malloy for a lack of transparency in the budget numbers. He said that bad news was dumped on reporters November 9, late on a Friday afternoon when few people were paying attention as they headed into the weekend. Cafero decried the notion that state tax revenues were $52 million below what was expected, saying that the number was clearly wrong.

\”We have a budget deficit, four months into the fiscal year, that requires a deficit mitigation plan,\’\’ Cafero told Capitol Watch last week. \”For the governor to come out with a press release using the figure $52 million is wrong. At worst, it’s deceiving and deceitful. Where does he get $52 million when the report itself says $128 million?’’

\”For the governor to put out a press release on $52 million is the least transparent, most deceitful thing I’ve seen,\’\’ Cafero said. “It’s wrong. It is very wrong, and that is unconscionable.\’\’

When asked Thursday by Capitol Watch about Cafero\’s comments on transparency, which has been one of the repeatedly stated tenets of the administration, Malloy said, \”He\’s wrong. Representative Cafero has expressed his desire to become governor of the state of Connecticut. You folks are going to have to get used to putting everything in context, and I\’m sure that that will appear in your papers every time you report what he has to say. Having said that, he\’s wrong. I don\’t know how else to say it. The data is the data. The data becomes available when it\’s available.\’\’

Cafero rejected Malloy\’s statement, saying he has made no decisions about running for governor. Regardless, he said late Thursday afternoon that the budget numbers are a fact.

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26 thoughts on “Legislators Told To Prepare For Special Session Before Christmas On $365 Million Deficit

  1. How many? That many?

    Just watch…..it will ALL be blamed on state employees and they will find a way to open up the SEBAC agreement and stick their hands in our pockets again. The unions will support it, as they care about their interests, not ours, and the dems will threaten to put forward a bill ending binding arbitration if state workers don’t give generously enough. Remember this was the playbook from last year and it will be resurrected. And the rabid state employee-haters will be gleefull.
    Bet your lungs.

    1. Kim

      Please delineate just what the state employees contributed to solving the problems that they are a huge part of? Was it the negotiations that made it impossible to lay them off? I’m just curious

      –Did your prescription copay go from $3.00 to $5.00?
      –Did someone ask you to work until you’re 52?
      –Perhaps someone is demanding you work 40 hours per week?
      –Or maybe they’ve threatened you with performance requirements and the possibility of actually losing your job?

      Of course, none of those things would be acceptable – it would make you too much like the working-class taxpayers who you feed off of without shame, all the while asking for more and more while giving less and less.

    2. Kim

      Let’s hope that an end is put to binding arbitration. It’s the single biggest problem with state employees unions, and the single biggest reason they are allowed to milk us taxpayers dry while we have to work an extra 20-30 years to pay for benefits and percs that we’ll NEVER have.

      It’s time state and federal employees joined the workforce and live by the same rules as the rest of us. Even if the face of communities across the country filing for bankruptcy because – in large part – of the outrageous deals unions have obtained through collective bargaining, the unions STILL have the entitlement mentality to think they’re being attacked and victimized by those of us who are sick and tired of paying for their pampered behinds.

    3. Billy

      Let’s see – record tax increase in 2012 and state employees gave up what?? Cople of suggestions for Dannel to mullover

      1) All state employee pensions frozen – move to 401k plans

      2) state employees contribute same amount to medical as comparable private sector workers.

      What do you think buddy?

      1. Alpinglow

        This, unfortunately, would not solve the problem with the pensions. The big deficit has to do mostly with obligations to already retired employees, so they have to be paid, period.

        The transfer of medical suggestion is also not as much as you think, for most state employees. It is something, but no where near enough.

  2. JBlock

    Can we stop saying “kick the can down the road” or elect to “punt” the problem for the next legislature. Do any of these clowns have any new terms. What a bunch of fools!

  3. Kevin W. Edwards

    Except for the governor, who is in a constant state of denial, is anyone really surprised at the projected state deficits? Of course revenue is down and going lower. All taxes are regressive and increased tax revenue only leads to increased spending. (Except for JFK’s tax reduction, the Democrats just have not ever been successful in addressing these two truisms.)
    The governor now states that the election results embolden him. The results, he claims, are a vindication/endorsement/mandate for his $1.6 billion historic tax hike. Maybe his statements are just code, a trial balloon, for him to justify enacting another one of equal magnitude soon.
    The governor revels in the recent financial anecdotal evidence that the “super rich” are selling stocks, homes, assets at the present time, post-election, to avoid the potential higher tax rate consequences when/if the Obama-Malloy vision of taxing the rich at a higher rate is fully employed after we all go over the fiscal cliff. This selling is due to more of a loss of confidence in our elected leadership than tax avoidance maneuvers.
    The governor chastens those who are projecting a deficit to “Hold on.” The badly needed, but not forecasted by him, increased tax revenue will be derived this year and added into next as these assets are sold and taxed as a means to plug the deficit. Governor: If this does materialize as you claim/hope/pray, please recognize it will be a one-time-only event. What will you do to gain additional tax revenue for the next fiscal year budget crunch?
    Those of you who would tax and seek taxation as a remedy always seem to forget about the creativity of human nature. (Darn those humans — they always mess up the best made plans!)
    I can assure you that with every tax put forth many people/entities will be creative enough to find ways to avoid them. So in this way, your tax schemes and your projected increased tax revenues will continue to fail and fall short.
    Will the current U.S. leadership heed this advice? Sadly, probably not. The Democratic fiscal policies of tax and spend and then tax again and redistribute the wealth are diminishing our economy, businesses and quality of life. We need a different fiscal model — there are too many large deficit numbers to bridge at the local, state and national level.
    This budget deficit (not a shortfall) is symptomatic of the many that will become so much more clearly evident if we continue to travel down this road.

  4. Antonio

    Blaming state employees is not the answer, but management types who get these outrageous salaries, has to be dealt with. So should all the shenanigans(salaries) that go on at the U GOT CONNED HEALTH CENTER, and THE U GOT CONNED UNIVERSITY. Employees who double dip, should be eliminated pronto, and be thankful they get a pension. Here are some suggestions for items to be hit with a sales tax. 1)TEXTBOOKS 2)INTERNET PURCHASES 3)ALL LOTTERY TICKETS. The legality of opening the agreement with the unions, won’t happen. 50,000 people didn’t get the state in this mess. The state hotshots didn’t have the brains enough, to look ahead. As that wack job Donald Trump would say, “YOU’RE FIRED”. Many will be held accountable. It’s getting so out of hand, that it will cheaper to eat your own money, and in so doing, at least you will be eating your greens…………..

  5. MrLogical

    Welcome to Connecticut, the land of one-party rule, and the state where citizens are prevented from recalling elected offcials who lie and fail to do the jobs they were elected to do.

    Last one out, please turn off the lights.

  6. MrLogical

    This pissant state is barely twice the size of the county I grew up in in the midwest and we’ve got nearly 40,000 state employees? And that doesn’t count all of the municipal employees.

    No wonder the state’s going broke. We’ve got roughly 1 state/municipal employee for every 10 citizens. And to make matters worse, for every taxpaying citizen there’s another citizen paying almost nothing in taxes. In fact, a good percentage of them are entirely dependant on the state and federal government; EITC, welfare, ADC, SSDI, food stamps, section 8 housing allowance, medicaid…

    Too many people in the wagon and not enough pulling it.

    1. Robin


  7. Tim White

    Uh-oh… Donovan’s still got his hand in the cookie jar. Maybe we’ll get lucky and the FBI will be keeping him “busy” during the special session…

  8. How many? That many?

    I’m tired….please call yourself an idiot.
    State workers don’t retire at 52, they DO have performance
    appraisals, many do work 40 hours a week and those that work 35 get.paid for 35…..and you want to know another truth, Kimmie? Sure, hammer public workers….with every concession, with every giveback….it emboldens YOUR private sector employer to take away more from you. Ha-Ha.

    1. Kim

      you sound tired. I agree – you’re an idiot. You must be talking about the performance appraisals that can’t say one bad thing or the union goes schizoid on the supervisor. It’s common knowledge that non-union bosses have to kiss union butts and even then, nothing gets done right.

      You’re probably responding while at your so-called ‘job’ in the public sector, right?

  9. George

    Let’s recap the last two years. Malloy takes over in January 2011 and the first thing he does is to increase salaries of Commissioners and other Executive Appointees by $15,000 to $30,000 plus…He then picks the low hanging fruit to consolidate the easy agencies…He then tackles education by eliminating two different Executive Boards and replaces them with the Board of Regents. He then selects friends to the top positions and pays them $200 – 300 Thousand…

    He fails to come through on his promise to really consolidate State Government; he leaves DMV alone and gives the Commissioner position to a good Democrat. He then fails to follow through to streamline MANAGEMENT, he was going to eliminate a decent percentage of them.

    He then agrees to give State Police Supervisors an approximate $30,000 a year raise each…then gives an approximate $40,000 raise to State Police Managers.

    He then hires more State Employee Managers to take over jobs that were being handled by other Managers, instead of continuing the managers to handle more responsiblity; that they were already taking care of.

    He then down plays the budget deficit, calling it a revenue problem. Finally, we still have a revenue problem but he must OFFICIALLY take action!

    In reality, Mr. Malloy and his sidekick Roy have failed to follow through on thier election promises. They have failed to honestly tackle Government Agency Consolidation, eliminating Managers, reducing State Employees, and increased wages for friends and select employees who work for his friends.

    Mr. Malloy’s upcoming budget reductions will be interesting, I wonder if he’ll as his friends to give up the extra raises he gave out and make the tough decisons to eliminate agencies and really streamline Government. Hopefully, some Democrats are salavating to primary Mr. Malloy in 2 years because i’m sure Republicans are lining up, seeing a big opening in 2 years.

  10. RW

    Roy Occhiogrosso should be fired!! He is just a lifelong Democratic State Central Committee mouthpiece and lackey.

    Senator Kane actually has it correct when it comes to the deficit the Democrats nose keeps on Growing Like Pinocchio’s nose.

  11. Alpinglow

    Malloy’s distinction of “shortfall” rather than “deficit” is valid and important. The state’s budget was balanced, and the projections it was premised on were reasonable.

    In fact, as Malloy has reminded us, the same Larry Cafero who now insists that there was some sleight of hand, criticized the governor at the time of, wait for it…. padding the budget. Not so much, eh Representative?

    The shortfall is due in significant measure to under performance in the financial sector this year – the recovery of earnings on the part of highly compensated individuals in the hedge fund and other sectors has not met expectations.

    Meanwhile, the sluggish economy means that there are higher medicaid expenses as more people are forced to rely on it.

    Pretty straightforward.

    Malloy has said he’ll submit a plan to deal with this in a matter of weeks, and that tax increases will not be part of it. When he does, the perpetually overwrought (“it’s the most deceitful thing I’ve seen”) Rep. Cafero will, as usual, have egg on his face.

    1. Sad Day for Connecticut

      Here is what is pretty straightforward about Connecticut after 30 years of Democratic rule: 1)A top worst state for retirees, 2) A top state for underfunded state pensions, 3) A top state for highest taxes, and 4)The top state for worst financial condition. Rep.Cafero’s face looks pretty straightforward clean to me.

  12. Sad Day for Connecticut

    Some have done well these last two years, for example the Malloy Family. Between Dannel and the Mrs., they are pulling $ 250 g’s annually, plus bennies from us Nutmegger taxpayers. Our so called balanced budget included $ 180 million in savings from union suggestion boxes. How did that workout ? Perhaps some enterprising cub reporter from our Capitol’s leading daily rag can bring us insight into these savings. I hope Mr. Malloy does heed Washington’s call, and takes Roy Boy along with him. Connecticut will miss neither.

  13. Nan

    Lets hope the people of CT will remember all the points that you’ve indicated here and vote him the hell out of office! We’ve had enough of his nonsense!

  14. How many? That many?

    Yes, Kimmie, I am at work at 6:14 pm…..not! And the idea, which you obviously didn’t understand, was to call yourself…..that means you calling you, by the way….an idiot. But you don’t really need to…your post does it for you.

    1. Kim

      As is typical of the name-callers and the unproductive, you are attempting to skate right by the issue AND my questions. Why is that How Many? You are right about one thing only – our posts show who the idiot is.

      Now, let’s try again – please be specific if you are able. Denial is insufficient unless you’re an idiot. Try answer the questions with specificity AND pointing out what the state employees have contributed in the areas I pointed out.

      Please delineate just what the state employees contributed to solving the problems that they are a huge part of? Was it the negotiations that made it impossible to lay them off? I’m just curious

      –Did your prescription copay go from $3.00 to $5.00?
      –Did someone ask you to work until you’re 52?
      –Perhaps someone is demanding you work 40 hours per week?
      –Or maybe they’ve threatened you with performance requirements and the possibility of actually losing your job?

      Of course, none of those things would be acceptable – it would make you too much like the working-class taxpayers who you feed off of without shame, all the while asking for more and more while giving less and less.

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