(CT) Budget hovers on brink of deficit as Malloy's fiscal cushion erodes quickly

The CT Mirror ^

[matt04]

Gov. Dannel P. Malloy's vaunted fiscal cushion has begun to erode quickly, and an underperforming state income tax is the chief culprit.

Fiscal analysts for the executive and legislative branches agreed on a consensus revenue report late Tuesday that pushes the current budget to the brink of a deficit -- or possibly over it.

More importantly, the controversial half-a-billion-dollar surplus Malloy and the legislature built into next year's budget -- after a record-setting tax increase -- has been chopped in half in less than seven months.

And the worsening fiscal picture also creates one more problem for Malloy, or more specifically for one of his major campaign promises. The first $75 million of this year's projected surplus is supposed to be used to begin the conversion of state finances to generally accepted accounting principles.

But on Tuesday evening, the governor's office was simply talking about keeping state government in the black.

"All today's announcement means is that, as is the case in other states with high wage earners, fourth-quarter revenue is coming up short of expectations," Malloy said, adding that he has directed Office of Policy and Management Secretary Benjamin Barnes "to pare back on current year expenses. But let there be no confusion -- we will end the current fiscal year in the black, and in a more stable fashion than this state has seen in many years."

...

Those unprecedented fiscal cushions were particularly controversial given that Malloy and his fellow Democrats enacted more than $1.5 billion in new state taxes to help balance state finances coming out of the recession.

But since June, revenue forecasts for the new budget have begun to fray.

[matt04]

Imagine that, raise taxes and tax revenue falls.

[brivette]

guess he’s never heard of the Laffer curve.

[y6162]

I called this in a letter to the local paper a year ago. I can’t wait to say I told you so.

Unions gave up nothing.

[Hoodat]

Why is this ‘news’? This is exactly what Connecticut voters voted for.

[j_tull]

This from the government that passed a tax increase in July and made it retroactive to January.

[molson209]

smarter than a 5th grader ?

[JohnD9207]

Really stuck on stupid...guess us hick Texans need us a big fat tax increase huh? Come home Rick and grow us some jobs!

[wordsofwisdom]

Malloy didn’t cut anything. He raised year over year spending and tried to act like it was a cut. He sold out to the unions and never met a tax increase he didn’t like. His budget actually had 100 millin savings from a suggestion box. But he’s in CT, you’ll never see a liberal questioned. It’s the people’s fault. He needed to increas taxes even more even though he made it retroactive in 2011. The people had to live with less but not Malloys cronies.

[ExCTCitizen]

Connecticut citizens please wake up. I wouldn’t let Mallory run an outhouse let alone the state. Please vote Republican this year. I know you can’t recall Mallory but you can vote theDems out in the state Senate and house.

[Daffynition]

Er...um...duh....um....Oh WAIT! Online gambling! That’ll fix us financially! ~ DannyBoy