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Signals coming from Hartford suggest the legislature will act sooner rather than later to address a budget deficit projection of $365 million. Both Democrats and Republicans also agree that higher taxes will not be part of the solution. We welcome the reports of both early action and leaving taxes as they are.
The projected deficit is nearly double the amount - 1 percent of the general fund - that constitutionally requires the governor to submit to lawmakers a plan to close the gap for the fiscal year that runs until June 30. The longer Gov. Dannel P. Malloy and the legislature wait to address the deficit, the more likely the structural problems causing it will increase the size of the shortfall.
At the core of the problem is the state's struggling economy. With the unemployment rate hovering at 9 percent, and many workers stuck in part-time jobs when they desire full-time work and salaries, human services spending is up, with the Medicaid health program for the poor causing substantial spending overruns, about $191 million thus far. At the same time tax revenues have also fallen short of projections.
Options are limited. All, or at least most departments should prepare to find ways to cut spending through the end of the year. Many vacant positions will have to remain open. Municipalities may see cuts in state aid.
Whatever the solution, Gov. Malloy and the legislature need to close the gap before the start of the next regular legislative session, Jan. 9. This is important, not only because the problem will grow worse, but because the state faces ever larger fiscal challenges moving forward as it prepares a spending plan for the next two-year budget cycle. Current projections show the state confronting roughly $1 billion shortfalls in each of the next two fiscal years. Dragging the current fiscal problems into that process would only make solutions more difficult. Such a cascading series of fiscal dilemmas occurred during the conclusion of the tenure of the last governor, M. Jodi Rell, and it did not end well.
It now appears Gov. Malloy and his majority of fellow Democrats in the legislature didn't fix the $3.5 billion crisis the governor inherited with this 2010 election, but mitigated it. The state is still operating beyond its means, albeit not as grossly. Connecticut has not placed its money problems behind it.