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    Tuesday, May 14, 2024

    Kerfuffle aside, fiscal problems remain serious

    Republicans are questioning whether the Malloy administration, hoping to boost the fortunes of Democrats seeking election to the state House and Senate, is hiding some bad fiscal news. Their evidence is a discrepancy between what the administration told its department heads and what it officially reported to the comptroller’s office.

    A Sept. 6 memo to department heads warned that current trends showed revenues flowing into the state coming up $133 million short of the budget target. Keep spending lean, agency leaders were told.

    But two weeks later, on Sept. 20, when the administration submitted its monthly budget projection, it contended the budget was in balance and on target, with revenues flowing in as expected.

    Republicans cried foul, contending the administration was hiding the deficit it had admitted to in the internal memo. With Democrats in control of the House and Senate, the announcement of yet another deficit projection could have been ammo for Republicans arguing voters should give Democrats the boot. Gov. Dannel P. Malloy, halfway through his four-year term, is not up for re-election, but that has not stopped Republicans from making him the target.

    “This is yet another reason why people do not trust politicians,” said House Minority Leader Themis Klarides, R-Derby.

    Certainly the public deserves forthright information and there should never be the cooking of books because an election is near. In this case, however, it appears the administration did nothing nefarious.

    Chris McClure, a spokesman for the administration, said the memo sent to the department heads took a conservative bent, taking into consideration the drop in tax revenues seen at the end of the last fiscal year, June 30. Its warning to department heads projected the potential for such an event this year, McClure said.

    The official report to the comptroller, he said, was a snapshot in time. It showed revenues a couple of months into the fiscal year remain on target.

    The whole matter is an overblown kerfuffle. No matter where the numbers now stand, the fact is Connecticut continues to have serious fiscal problems. As to where things stand right now, before the election, the Republicans have asked for a report from the nonpartisan Office of Fiscal Analysis. Expected this month, that report should settle the matter.

    Even if the administration is right — that at this point things are in balance — the news is still not good. State Comptroller Kevin J. Lembo, a Democrat, has said there are reasons to be concerned about the $19.7 billion state budget.

    It assumes, for example, that the governor can find another $191 million in additional savings not spelled out by the legislature. Given the cost cutting already seen in recent years, including about 1,000 layoffs since April, finding those additional savings will be a challenge, Lembo said.

    As adopted, the budget also anticipates a pick-up in income tax and other revenues after weak performance last year. And it holds operating costs flat, in contradiction of normal inflationary pressures.

    As for the budgets the lawmakers elected in November will have to prepare — beginning with fiscal year 2017 that starts on July 1, the Office of Policy and Management projects it to be $1.2 billion in deficit before the budget debate even begins. In other words, projected spending growth has to be reduced and/or revenues increased to prepare a budget that balances.

    It has become a reoccurring theme in Connecticut.

    So while they may or may not have a deficit to point to early in the current fiscal year, Republicans have plenty of ammunition to claim that Democrats have not done a good job in maintaining the state’s fiscal health. So far the solutions offered by the Republicans include wage freezes, increased contributions to the pension system and higher co-pays by state employees, requiring approval by the legislature of all state contracts and, of course, making government more efficient.

    That won’t get the job done, but at least it could be the start of a discussion, something the Republicans can’t have if they don’t break the Democratic dominance in Hartford.

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