State Deficit Projection Hits $415 Million

by Categorized: State budget Date:

State Comptroller Kevin Lembo said Monday morning that the state is now in danger of running a shortfall of $415 million for this year, up $50 million from a month ago – and it could grow worse.


That forecast, contained in Lembo\’s monthly letter to Gov. Dannel P. Malloy, emerged after Malloy last week had already ordered $170 million in budget cuts intended to reduce the deficit by $123 million; the other $47 million would come from reductions that already had been planned but not yet enacted.

Those cuts were ordered in response to last month\’s estimate of $365 million by the governor\’s budget office, the Office of Policy and Management. But with Monday\’s new projection of $415 million by the comptroller’s office, \”that leaves a projected remaining deficit balance of $242 million to be addressed through additional mitigation initiatives,\” Lembo said.

Lembo attributed the $50-million difference between his estimate and the governor\’s to spending by state agencies above their budgeted levels, particularly with regard to Medicaid health care costs for low income persons.  “Statewide agency appropriations projected to year end are running above their appropriated levels even after consideration of OPM’s estimated deficiency appropriations,” Lembo said. “Medicaid – the largest single gross appropriation line-item in the budget – is significantly above the budget target.\”

Roy Occhiogrosso, a senior advisor to the governor,  said Malloy disagrees with Lembo\’s calculations.

\”However, the Governor, Comptroller, and it seems legislators all agree there is a current year shortfall that needs to be addressed before the end of the calendar year,\” Occhiogrosso said. \”The deficit mitigation plan the Governor will propose within the next couple of weeks will, based on the best available data at the time, bring the current year budget into balance.”

“Medicaid experienced double-digit increases last year and many of those trends are continuing this fiscal year, according to data from the Department of Social Services,\” Lembo said. The current fiscal year\’s budget \”relied on over $100 million from Medicaid program savings initiatives, many of which have not been implemented to date, while caseload growth continues in the low-income adult program area with the addition of more than 4,000 clients since the start of the fiscal year.”

Lembo said he\’ll be on the lookout for signs that the deficit will climb even higher – noting additional \”budget risk factors\” including unreimbursed costs from Hurricane Sandy and possible reductions in federal funding. \”I am also concerned that other national and international economic factors could further erode the consensus revenue forecast,” Lembo said. “I will be closely monitoring any changes in these areas.

“Projected state spending above budgeted levels, and the slow pace of national economic recovery are impeding the state’s ability to bring the budget into balance. Economic indicators are below the levels normally observed at this stage of a recovery,\” he said.

State legislators are expected to address the deficit when they return to the Capitol in Hartford for a pre-Christmas special session.


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55 thoughts on “State Deficit Projection Hits $415 Million

  1. Herman from Hartford

    Well at least Malloys people are saying we have a problem, Rell would just kick the can down the road.

    1. Kim

      please be specific.
      –Precisely how did you ‘give’ at work?
      –How much is your prescription copay?
      –How much is your doctor visit office copay?
      –When was the last time you feared losing your job?
      –do you get to stay home as ‘non-essential’ when the need arises?
      –describe your retirement benefits and their costs to you?
      –describe your retirements benefits and how they affect your spouse and family?
      –does your child get free or reduced tuition rates at CT schools?

      Depending on how you do with the above, there may be more questions.

      Failing a clear, concise response – save your kvetching. You folks should be at the top of the list when it comes to reducing the cost of government

  2. Richard

    Honesty. Finally!

    When’s Dan’s Press Conference with the “I can’t ask for concession from SEBAC or appointees or patronage cronies or negotiate Haz Duty Pensions. But I can cut services to the most vulnerable or tax the rich. I can’t improve government but I can spend more!”

  3. Billy

    It’s clear that OPM’s budget projections are worthless.

    Let’s push for all new state employees and teachers to have the same retirement plans as the private sector – that’s new employees – not exisiting. These costs are out of control.

    1. Kim

      and no collective bargaining.
      and no guarantees of a job – let’s have some REAL performance testing.
      and no more COLA increases
      and no more STEP increases
      and no more LONGEVITY increases

      That’s just for starters

  4. JBlock

    Those tax increases worked out well. Lets see what else can we do…Oh I know, lets raise taxes!! That will be Rick Green’s next column.

    1. CeltinWood

      Firing/laying off anyone would only add to the burdeon of the welfare/state healthcare rolls while reducing personal spending and contributions to revenue – thus negatively affecting the economy in the end. All those employees….currently adding to the economy by frequenting small/large business, paying rent/mortgage, paying taxes, donating to charities, etc…. Simply gone? All that money no longer in circulation but maintained as hypothetical calculations by the state. Houses foreclosed, taxes unpaid, more mouths to feed, etc… Yeah, that sounds like a GREAT idea…..(not).

      1. Kim

        very poor reasons to continue with the status quo regarding state workers, Celtin. Maybe handouts should be curtailed as well, ya think? Government needs to be run more like a business, instead of GIVING taxpayers the business

        Are you going to pretend that there’s no abuse with the entitlement/handout system we have going?

        maybe many of those on the dole would return to their home countries if we stopped forking out money to them

        why should I pay for cell phones for welfare receipients?
        Why should welfare be available to virtually anyone who asks for it?
        Why should disability be available for virtually anyone who asks for it?

      2. Kim

        what do you mean that ‘money no longer in circulation’? If government is downsized, my taxes should go down. I think I can do a better job of deciding how to spend my money than someone else can.

        What nonsense

  5. How many? That many?

    50,000 people last year contributed 1.5 billion dollars to the cause. But in reality, with pension and benefit changes it is billions more in the next few years. We gave at the office. Beware Democratic legislators. You screw us and we will have the last laugh at the ballot box.

    1. CeltinWood

      I can’t see ANYONE voting for Malloy. Not state workewrs, the general public, etc…. No one – in our daily conversations/interactions that cover half the entire state – has supported the Governor, his plans and ideas nor do they want him to make a repeat performance. I beleive you – and everyone else – has nothing to worry about…..

      1. Kim

        right Celtin, all those people who he arranged to NOT lose their jobs – they’ll vote for someone who wants to actually fix things.

        If no one supported the governor, why is he the governor? The answer is simple – you union folks know that you own him and all the other Dems.

        Pathetic attempt to spin things.

    2. Kim

      now the truth is coming out. In between laughing out loud at your so-called ‘contributions’, it’s good for the taxpayers to see the truth about how collective bargaining and state unions strong-arm the politicians to screw the taxpayer. Thanks for a little bit of honesty for a change.

      You’ve provided the best examples of why you need to go. If you get ‘screwed’ by the politicians you have recourse – not supporting their reelection campaigns. What’s the taxpayer recourse for getting screwed by you union folks? There is none – yet. Your time is coming and your entitlement mentality will make it a lot easier for people to make it happen without pity. You have no pity on your neighbors – don’t expect us to listen when you cry out for help

  6. citizenct

    Reduce payroll levels – offer a retirement incentive, similar to the private sector. Coupled with attrition, the key is to NOT rehire: delay rehiring or streamline government. Rehires are at lower salaries and at lower pension costs (lesser plan).

  7. Shoreline Resident

    I have one question regarding this statement: “The current fiscal year’s budget “relied on over $100 million from Medicaid program savings initiatives, many of which have not been implemented to date….”

    Why not?

  8. Patrick

    Malloy and our elected officials are out of control. Malloy should have never caved to the union. He’s already paid them off with this absurd busway.
    Oh, and ask him how much additional revenue has come in since package stores opened on Sunday. My guess is nothing.
    Reduce spending and bring the benefits to state employees in line with the public sector. We can’t afford these.

  9. ccbeachcomber

    Anyone notice Demo’s are trying to pull the same stunt on a national level with a 1.5 trillion dollar tax hike? How do you think that will work out? Right. Only worse.

      1. Kim

        Joanie, you are in for a BIG surprise if you don’t think your taxes are going up. See you next year – will you be honest enough to come back and change your statement?

  10. CeltinWood

    A.) To consider laying off hundreds or thousands of state worker, in a climate that has already witnessed increased enrollment in state funded health care and welfare is SUICIDE for all. It will – in fact – increase demands on the state economy as they will no longer be able to SPEND their earnings yet will depend upon all of US to be supported….thus reducing our expenditures and eventual contributions to state coffers in the longs run (I.e. sales tax, etc…)
    B.) The state NEEDS to make a better environment for small business. Businesses that can actually employ the people that are now supported by the state and thus taking them off the state welfare system. Reduce expensive business taxes, licensing fees, insurance requirements, etc….
    C.) It is time – HIGH time – to discuss/reconsider the old, highly unrealistic pension terms had by state workers of averaging their “three highest years”(inclusive of Overtime). You get a percentage of your highest base salary and thats it… plain and simple. Solves a great deal of problems.
    D.) Malloy needs to be MADE to listen to the public about wasteful investments in projects such as the busaway, etc… Any waste is too much waste and adds to the deficit. The busway will be considered a waste just like we now consider the HOV lanes a waste…… (ever see anyone use them? Didn’t the state consider transforming them into regular lanes?)
    E.) The Gov and/or his comptroller should explain the difference in their caculations – at length.

    1. Kim

      part of the problem with oversize government is your willingness to accept as a given that it’s appropriate for ‘us’ to be responsible when ‘they’ “depend upon all of US to be supported”.

      B: agreed but you forgot to include all the other undeserving recipients (and I don’t mean the truly disabled)
      C: agreed, but you forgot much, much more. Pension reform is only the beginning. My other posts give clues to my meaning
      D: you contradict yourself here. First you threaten state government if they ‘screw’ you, but then insist that we ‘make’ Malloy stop providing the benefits, percs, and salaries state workers and other unions can expect from the wasteful spending. You can’t have it both ways.

    1. CeltinWood

      Agreed. Discontued such extravagant pensions and base them simply on their salary – sans OT, benes, perks, etc….

    2. Kim

      Celtin doesn’t seem to have a problem with 6-figure salaries and lifetime benefits for CT workers, only the pensions. Are you beginning to see the problem a little more clearly where state workers are concerned?

  11. th3p00r

    Malloy cut education and disability fund. what about the welfare (money for the lazy people that don’t to work), I see alot of healthy people on welfare not because they’re in need but because they’re lazy.
    Why don’t you cut the welfare, Malloy?

    1. CeltinWood

      Other than a very small fraction of state employee who actually listened to the suggestion of their unions (to vote Malloy), the entitlement class were the core reason Malloy won by one half of one percent in the overall election to begin with……

  12. Joe

    Connecticut is a microcosm of the country. Malloy has run this state into the ground with tax and spend just like Obama. Keep voting these liberals in…you get what you vote for.

  13. Paul

    Just please, I beg you, do not touch any money earmarked for the next food spoilage giveaway! Many in this state, myself included, depend on giveaways of taxpayer money with no criteria for receiving it other than showing up to get it.

  14. joe867

    There was a time, 20-30 years ago when being a Connecticut government employee meant low wages in exchange for job security. But now the tables are reversed, with their wages and benefits far exceeding those found in the private sector. Answer, make them pay their fair share. A special tax on active and retired State Employees.

      1. Kim

        therin lies the problem Joanie. You expect Washington to keep spending like a drunken sailor while in the same breath saying “Only the top 2% will see a tax increase….at it is ABOUT TIME”

        you want more you have to pay more – it’s not rocket science

  15. Da Troof

    Unlike the Federal Government which prints money daily to fund its massive debt, the party is over in Connecticut. The tax, spend, and borrow liberals are out of tricks and the bill for all their shenanigans has come due.

    Oh Danny boy….the bill the bill is calling you….

  16. The Conn-servative

    Ya know, this budget deficit is really no surprise. Danny boy and his minions force-fed us a budget that was in part based on state employee concessions that hadn’t been agreed/voted upon yet(1.5 years ago). Do you balance your household budget on “projected” revenue? He has strategically given us the good news first,knowing that his opponents may once rejoice, with various state agencies SUPPOSEDLY lined up to take a miniscule hit. After Jan 1,his cabinet will be pleased to announce new taxes to balance the budget that the dumb-e-crats just keep running up.
    Danny, a little primer: Get rid of all gender and ethnic specific commissions at the capitol. They serve no purpose other than political appointee positions. Get with the program already.

  17. coscars

    File for bankruptcy in start over, just like GM did. When I start over these the things I would do. I would have no sales tax on cloTHS shoes, I would lower the sales tax on gasoline to be the lowest in the country, were Connecticut would have the cheapest gas available through the country, I will lower the cigarette tax to the cheapest in the country were cigarettes would be the cheapest you can buy anywhere, I would have to cheapest alcohol U can buy anywhere in the United States get rid of all the sales tax make it a minimum, I would have a 10% tax on restaurantfood and a 10% hotel tax anybody to stays in one of our hotels, would adjust the sales tax to 7% on everything else that you buy, and then watch what happens, people will be flocking to the state to travel to our casinos, to buy a cheap clothes and all our new outlet stores that will be opening up, while the new super liquor stores that would open up that would employ people they would buy their products and in visit all our popular tourist sites will be busy, and we won’t have to do give these factories money and incentives to do business in Connecticut it would want open up on their own.

  18. JoanieW

    In 1 week the deficit went up by $50 million. If this increase happens every week, the deficit will be close to $3 billion dollars for one year. Time to layoff at least 10% of State workers and Slash the benefits for the remaining ones.

  19. TomL

    By coincidence $415 million is the amount of Money Malloy has given Fortune 500 Companies under the First Five Program…

    1. Kim

      it’s not a coincidence – they just want you to think so. I know, you were being sarcastic, but I’m just sayin’

  20. David Canuel

    There are no possibilities for closing budget gaps of the forecast magnitude for this FY and next without either another tax hike or default on the state’s bond obligations (or both). Look for the adminstration to once again start demonizing “the rich,” who aren’t “paying their fair share” over the next few weeks, and look for “serious” analysis of the choice we face between paying “rich bondholders, banks and insurance companies” their principal and interest vs. paying “teachers and first responders middle class wages.” It’s coming.

    1. Kim

      state workers are part of the 1% and should be treated as ‘the rich’ and pay ‘their fair share’. Taxpayers need relief from the burden of supporting government

      1. The Conn-servative

        Public employees in essence don’t pay any income tax. Their money flow is a closed loop system with the government. They get paid by the government and a portion of that money(income taxes) goes back to the government which then pays the employee again and this continues.
        The private sector employee gets paid by his company or themselves (self-employed), through selling either a product or service.From the charge of this product or service, the g-mint levies their taxes on you.The difference being,this person doesn’t get any salary from the government to start with, hence it is more of a open loop. The only way a public employee would pay an actual income tax would be if they paid taxes to the government greater than what they took home in pay from them. Hence, this along with more people in the cart than pulling it is why we are at this junction. I do agree with the premise of your comment.

        1. Kim

          Conn-servative: thanks for the long overdue clarification on public employees and taxes – the concept has been around for quite some time but not put into words so eloquently. A rational person would think that your explanation would put a stop to the oft-repeated comment from public employees that ‘we pay taxes too’ – but I won’t hold my breath.

  21. NHMAN

    Well, simply eliminating the requirement that all contractors are unionized would save about 30% on all State contracts immediately. Seems like a no-brainer savings, but it would mean the beginning of the end of unions dominating Connecticut, a State which is historically “of the unions, by the unions and for the unions.” So glad I moved to New Hampshire!

    1. Kim

      glad you moved to NH? Didn’t Obama take NH by 4-6 points? Seems like NH is changing it’s once enviable position as staed in it’s motto: Live Free or Die

  22. Kim

    There’s one thing I’m sure of: If they’re ADMITTING to $415M you just KNOW it has to be MUCH, MUCH higher than that

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