Friday, March 01, 2024

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CT Budget Closes in Deficit Again; Little Reserves Left for This Year

By Keith M. Phaneuf

www.ctmirror.org

Connecticut today officially closed its second consecutive fiscal year in deficit, shrinking its budget reserve to a low level as threats of another shortfall loom.

Comptroller Kevin P. Lembo certified a $170.4 million deficit for the 2015-16 fiscal year, a gap equal to 1.5 percent of General Fund spending. (Though the last fiscal year ended June 30, the comptroller cannot close the books until late September, since certain tax receipts received over the summer are applied to the prior budget.)

Lembo must again cover the deficit by drawing from the rainy day fund, which will be left with just $235.6 million. The new reserve is less than half of what Connecticut had before the consecutive annual deficits. More importantly it leaves Connecticut with a fiscal cushion equal to just 1.3 percent of annual operating costs.

The comptroller recommends a rainy day fund of 15 percent, given the large fluctuations in state income tax receipts Connecticut traditionally faces in very good and very poor economic times.

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2 thoughts on “CT Budget Closes in Deficit Again; Little Reserves Left for This Year

  1. Westporters—the state is in a death spiral and we need to chnage Hartford.  Our own Rep Sternberg voted to approve two of CT’s largest tax increases (and do not let hiom tell you anything else) and the financial deficts continue to grow.  Busineses and people are leaving and state income tx revenue declining.

    WE NEED A DIFFERENT DIRECTION!!

    Westport home prices are declining as no new businesses move into our area.  Cablevision laid off 600 and GE moved out 200 executives to MASS.  And Rep Steinberg voted to increase the death and gift tax on seniors.  You cannot nake this up.

    Your call Westport.  The death spiral in CT will continue unless we vote for change.

    Cathy Walsh is a good person and will led the chnage we need in Hartford.  If Steinberg is re-elected—his leadership will stay in control of the budget, taxes and legislation.  We can no lober afford to let this happen.

    Westport—your choise.  If Steinberg wins, you have nobody to blame but yourself.

  2. It seems that financial failure is cooked into the books for the State of CT. The old saying that “Crisis causes Change” does really apply here. When the State can no longer float, refinance or redeem it’s debt the folks in Hartford will have no other option than to force change onto an imbedded governmental structure that does nothing to head off the impending financial doom.
    Business as usual can no longer be tolerated, drastic change must take place on the expense side of the equation. The State’s revenue base is decreasing at a faster rate than the decrease in expenses.
    The financial crisis that is looming can take many forms from significant downgrades of the State’s debt to starving the local Towns that need funds to survive.
    It’s all up to the voters, it may be too late, to raise hell with their elected officials to force change. If this is not done then changes that will be made will be forced upon the State.
    Tom Bloch

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