State Looking At Red Ink For Next 3 Years; GOP\’s Cafero Says It\’s Not Transparent At All

by Categorized: Democrats, Gov. Dannel Malloy, Larry Cafero, Republicans Date:

Despite the largest tax increase in state history, the state\’s budget deficit is worse than most legislators expected.

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. 

Republicans are already calling for a special session and a deficit-mitigation plan to chop down the looming deficit.

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

\”This is not a deficit,\’\’ Malloy said. \”It\’s a shortfall.\’\’

Since last Friday, 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 late Friday afternoon, saying that few people were paying attention as they headed into the weekend. He 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 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.

\”Whether I say it, Tom Foley says it, my mother says it, a fourth-grader says it, we\’re repeating facts from his own Office of Policy and Management,\’\’ Cafero told Capitol Watch. \”It was his decision, his gamble [on the budget] to go a certain path that hasn\’t worked. … It didn\’t work. We knew it wouldn\’t work. He made a decision to balance this budget on tax increases and phantom savings alone. He did not reduce spending. He increased it. It doesn\’t take a math whiz to figure out that doesn\’t add up. It doesn\’t take a rocket scientist to realize you\’re going to have a deficit. We predicted it when he passed the thing.\’\’

\”Who\’s playing fast and loose with the facts?\’\’ Cafero asked. \”I\’m just going by his figures, his statements. We\’re in very bad financial shape. Let\’s admit that it hasn\’t worked. Stop playing defense, governor, and fix the problem.\’\’

When asked Thursday by a television reporter about the report by Hartford-based Conning Inc. that was featured on the front page of Thursday\’s Hartford Courant, Malloy said he had not seen it.

When asked, Malloy said, \”They\’re probably using 2010 data. … I haven\’t seen that particular one, so it\’s difficult for me to make a comment on. Who was it? I haven\’t seen it.\’\’

The TV reporter, Mark Davis of Channel 8, responded that the data was from 2011.

Malloy immediately ruled out offering an early retirement incentive program for state employees – some of whom have been seeking incentives to leave their jobs.

\”No, we don\’t pay people to retire,\’\’ Malloy responded quickly. \”We don\’t pay people to retire because it further burdens the retirement system, which none of my predecessors funded properly.\’\’

Malloy went back and forth with veteran reporters Thursday about whether he would propose raising taxes further.

\”I have no intention of raising taxes,\’\’ Malloy said. \”No, I\’m not leaving a window open. I have no intention of raising taxes. … I have no intention of raising taxes. …. I\’m giving you as definitive language as I am comfortable giving you at the moment. I have no intention of raising taxes.\’\’

He added, \”We have absolutely no intention of raising taxes in dealing with the next biennium. Folks, that\’s the language.\’\’

The latest fiscal projections show that the deficits will continue in the “out years’’ of 2014-15 and 2015-16. The projected deficits in those years are $958 million and $907 million, based on the state’s current level of services. The “current services’’ designation is important because that is a projection that is based on a whole series of factors and assumptions that include, but are not limited to, the size of the workforce, current salaries, and various inflation factors. As such, the legislature is still able to “cut’’ the current services budget without making the size of overall budget go down from one year to the next.

The current deficit of $365 billion is for the fiscal year that ends on June 30.

When asked by a TV reporter whether he sees any signs that the economy is getting better, \”I watch this stuff on a day-to-day basis, as you might imagine I do. There are probably more negative signs with respect to the period between now and July 1. I think a quick resolution to the problems in Washington could change that substantially. I think the longer the problems in Washington continue, the more dampening the effect that they will have.\’\’

\”Reductions in the workforce are not off the table. We have the right to continue to reduce workforce through attrition, through other means as well. There are guarantees in contracts through a certain date. … Having said that, there\’s relatively little room to move - but there\’s room.\’\’

He added, \”The Republicans were accusing me of building surpluses into the budget, which obviously they were wrong about. But they\’ve been wrong about other things, as well.\’\’

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49 thoughts on “State Looking At Red Ink For Next 3 Years; GOP\’s Cafero Says It\’s Not Transparent At All

  1. Kim

    The solution is obvious – hire thousands more state employees so they can start spending money and stimulate the economy.

    Just a note: If you agree with this approach, you are part of the problem

  2. joe867

    These are all conservative based lies, there is no deficit, and if there is, its the prior Republican administrations fault. I here-by declare the word deficit shall be replaced by the word short fall in all discussions and communications. Everything is just fine in our state, we have nothing to worry about, we’ll just issue more credits, bonds, and give away state property to any new casino ready to relocate to our great state. Still Revolutionary I say.

      1. Kim

        you have to look behind yourself in line to see him, chrissy. What is it you disagree with in joes’ statement? Perhaps you don’t recognize sarcasm?

  3. Richard

    The solution is obvious: have Kevn Lembo triumph the success of SustiNet and CT’s medical insurance cost containment n Hartford while at the same time Roy Ochiogrosso holds a press conference in Bridgeport announcing another waiver submission to roll an additional 10,000 people off of Medicaid while Dan Malloy is holding a presser in Stamford explaining why Cafero is always wrong and there will never be a deficit under a Malloy admnistration as long as GAAP is never implemented and yearly operatng costs can always be bonded at a lower rate of interest and packaged in a bond deal while AIG execs look on approvingly.

    Then Dan can remind everyone once again that he can’t lay off any state workers as stipulated by his artfully negotiated contract but he can indeed cut the services and benefits delivered to taxpayers and encourage state workers to put in 3-days at the office and the rest of the hours at home instead of wasting gas to drive in and dick around.

    1. BSmith

      The problem is not the lack of layoffs. It’s that we were told that thru attrition the ranks of state employees would lessen. That hasn’t happened because for every state employee that retired, another was hired: No savings there. Additionally, how many millions were spent on cutting trees on our highways in response to last years October snow storm?? Name one community that last their electricity because a tree came done on 84, 91, 2, 395, 95, … And how much more was wasted when the median on Rt 2 was clear cut in error?? Much like the federal government, the State of CT employs nobody who has any sort of fiscal sense, nor have the voters elected anyone with the same. We just need state leaders with common sense, not those that are so wrapped up on playing the blame game anytime something goes wrong.

    2. Herman from Hartford

      excellent comment. What a mess. Well at least Malloy knew what he was getting into when no one else wanted the deficit cutting job

  4. sue

    THE CHICKENS HAVE COME HOME TO ROOST. Yes I borrowed that line from Barrack’s pastor. Remember him. DANNY BOY’S HONEST budget was a LIE a VERY BIG LIE. Remember the shared sacrifice well we got it up you know what and our overpaid underworked PUBLIC employees sacrificed NOTHING. They still get longevity bonuses to the tune of $100 million a year. And DANNY BOY has been on a hiring binge. I have friends in Hartford. They tell me DANNY BOY has hired thousands of NEW employees after he offered an early retirement – yes taxpayers he offered an early retirement since he raised the retirement age by what like two years. Time to end the giveaways to the PIG businessmen. This just adds to the debt which is NOT in the spending cap. You know the make believe spending cap that our CORRUPT CT SUPREME COURT would not enforce because the CORRUPT judges want to get reappointed every 7 years and they wouldn’t if they actually did their job.

  5. Caroline

    Malloy himself came out and told us himself about this great surplus that we were all going to have! Someone please check the footage, as our lousy president says. When pushing for the biggest tax hike in CT history and this shared sacrifice idea, Malloy tried to assure the public that all was going to be just fine for CT with the surplus that HE planned for. It’s great when our government leaders want to pat themselves on the back and say that we won’t return to the policies of the past, but it looks to me that we are just doing the same old thing, time and time again. And now the chickens are in fact coming home to roost in CT and in Washington DC – credit downgraded, skyrocketing debt, high unemployment, record levels of poor and working poor, more hungry children. I cannot believe that people STILL believe that democrats will save us, but yet they still vote them in time and time again. Shouldn’t surprise me, but it does every time.

    1. Herman from Hartford

      Danny Boy has done a good job so far. Question- has he implemented GAAP? By now we all know, politicians basically say what you want to hear. When things go wrong its someone elses fault.

      But Danny Boy was the only dude who really wanted this job of cleaning up the state diaper.

  6. JBlock

    I am from North Haven and one of the problems is that Republicans are too busy stabbing each other in the back. I was at an event recently and my state senator was totally going off about senate leader McKinney. I thought he was a democrat but it turns out mackinney is my senator Lenny Fisano’s leader. I guess mr. McKinney is too busy socializing than doing work according Fisano. Kind of funny but I wish his anger was aimed more at Malloy.

  7. Da Troof

    Looks like Governor Dan has his work cut out for him. There’s only one thing to do when outyear deficits surge to $1B per year: raise taxes! Yes folks, work harder as the nouveau riche state workers need more of our money for their bloated salaries and unsustainable health care/retirement benefits. And of course lets not forget the urban voting centers who need more and more free stuff in exchange for reliable votes for Democrats.

    This state, like the country is doomed. Keep voting socialists like Barry and Dannell and let the good times roll.

  8. Dr. Aki Bola, Esq.

    Subtitle: Tax-And-Spend Malloy has doomed the state economy, entirely as predicted. Don’t forget to thank your local democrat politician.

    1. Kim

      Actually, this is what’s happening throughout the world. We’re simply emulating them and trying to return to those things we fought so hard to escape

  9. Sharpshooter

    “The projected deficits in those years are $958 million and $907 million, based on the state’s current level of services.”

    What do you expect from a tax and spend General ASSembly and governor….as sales tax rates go up….private sector spending goes down…..the problem is not the tax rate but the spend rate(current level of services)….something the Courant refuses to shine a light on…..

  10. Tim

    The State of CT is going down the path of the auto industry – burdened by pensions and health insurance for life plans. No politician will have the guts to do this, but the state employee’s pensions that are sucking our tax dollars dry should be moved to 401k’s. This is what the private sector has done and has saved many a business’. Eliminate the steep pension and health care payments and problem resolved.

  11. DR

    To any young person reading this: This should be the final reason you need to leave Connecticut and to never come back. The future is elsewhere – Connecticut is past its prime and is continuing to fall further and further behind the rest of the country. Other states offer much more opportunity and stability with lower costs of living.

  12. Robert

    The ONLY way out of this mess is to reduce the State employee payroll. With contract language relating to layoffs etc,, the only sensible thing is to offer an early retirement package. Look at the demographics of the ranks. Thousands would take the deal.

  13. Paul

    When you give away food spoilage money with no oversight whatsoever (remember that beauty of a giveaway) then it shouldn’t surprise anyone that the state is in a financial mess. There is a need for fiscal sanity but it is clearly hard to find.

  14. Quan

    Malloy says it’s a shortfall. Hey Ding Dong, it’s a deficit. The moron never met an expenditure he did not embrace nor did any of his reprehensible and irresponsible Democratic brethren.

    Danny Boy, if you think the state employees are going to pull your bloated rear end out of the fire once again, you are dead wrong. You had better get your entitlement-minded followers ready for a world of hurt. I, for one, am done with carrying your ridiculously reckless financial binge.

    1. Anonymous

      He’s going to Washington to suck up to Obama. He doesn’t give a damn what happens here in Connecticut. He’s already GONE….leaving us with the mess.

    2. Kim

      what do you mean ‘AGAIN’ Quan? When did the state employees contribute to solving the problems that they are a huge part of? Was it the negotiations that made it impossible to lay them off? Just curious

  15. Jack

    We are Greece. Let’s face it guys. We get what we deserve when we elect Obama clones to state office. I am moving out of state and telling my kids to do the same. Lots of luck!

  16. Charlene

    What a bag of vinegar and water. One and Done-Dan. Ooops -sorry – One and Done-Dannel. 49 other states knew the guy was delusional when he proposed his first budget. He said CT would take a “different path.” We did – right off a blanking cliff.

    Poor Nancy Wyman. She will be left holding this Bag’s bag when he leaves for Obama-land, if they are nuts enough to take him.

  17. Bob the taxpayer

    But please tell me our $700,000,000 busway is safe. That’s the whole key to turning this state around. It must be. Otherwise, why would any sane person support that project given our financial position.
    The first rule to get out of a hole: stop digging.

  18. Jim

    Ain’t Liberalism grand!

    Ok…one more time for the especially slow ones that STILL don’t get it: raising taxes always results in lower tax revenues for the state! Businesses and individuals pull back spending where taxes have increased. Wise and prudent people buy more products online and out of state and while they are there will also fill their tanks with bargain gas!

    This happens every time so any element of surprise from this revelation is truly sad.

    The beauty about this state is you have absolutely nobody to blame but Democrats. There are virtually no Republicans in the legislature and now that we dont even have the stop-gap of a Repulican governor they are free to practice their stupidity unrestrained!

  19. Mr. Tibbs

    I will not be making concessions if asked, I have done so 2x in the past 4 years and still, the budget is not balanced. Layoff threats are coming…

    1. Kim

      so mr. tibbs, tell us about your concessions? Did your prescription copay go from $3.00 to $5.00? Heavens, you must be destitute.

      Did someone ask you to work until you’re 52? Oh my god, what were they thinking?

      Perhaps someone is demanding you work 40 hours per week? Now that’s a crime

  20. Steve

    One word: BUSWAY. Second Word (ok cheating): expanded UConn Health Center. Stop wasting this money on crap no one wants except a few politicians and construction workers.

  21. Gary

    Yes ladies and gentlemen, people do have a choice when you raise taxes. They can change their legal residencies to other states where income taxes and estate taxes are less or not imposed. They can cross the border and purchase items subject to lower taxes in those states. They can be forced by the additional business taxes to postpone hiring new workers or investing in expansion or, as many have, closed shop or moved out of state. Either way you analyze it, raising taxes in a diminishing local economy only exacerbates that contraction. Without a reduction in state government and spending the burden of the resulting deficit falls on those remaining. How is that so difficult to understand for our Legislature and Executive branches?

  22. Brian

    I think we should build another busway. From Bristol to Terryville. That will solve the state’s deficit.

  23. Anonymous

    Here’s the solution. Implement another “employee suggestions” program. That’s good for another $350 million. Yeah…right.

  24. Anonymous

    The citizens of Connecticut deserve what we get for voting all these Dems in. They’ve NEVER shown any fiscal restraint. Whatever the unions want…they get. It’s like handing the keys to a bank to a spendaholic. But here’s a suggestion. Since requiring the state employees to get health exams saved SOOOO much money, we should go one step further, and save even more! Force them to all get colonoscopies. P.S. The CT state pensions are better than even the federal pensions.

  25. Hank Sullivan

    STOP THE SPENDING!

    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.

  26. Kevin W. Edwards

    ” Except for the Governor,who is in a constant state of denial,is anyone really surprised at the projected 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 $1.5 billion dollar 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 is 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?]
    Governor-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 US leadership heed this advice? Sadly, probably not.-The Democratic fiscal policies of tax and spend and then tax again /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.
    These budget deficits(not shortfalls) are symptoms of the many that will become so much more clearly evident if we continue to travel down this road. “

  27. Common_Tator

    I feel a Song coming on – “Red ink IN a Blue State…” Buck up idiots everywhere; The only reason CT has a “DEFICIT” – is because we HAVE A BUDGET! ! ! March on WASHINGTON if you can afford the gas – or mass transit – to get there!

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