By Keith M. Phaneuf and Mark Pazniokas
Responding to a weak stock market, Gov. Dannel P. Malloy today ordered $103 million in emergency cuts, including a major hit in Medicaid payments that ultimately will cost hospitals about $190 million in state and federal funds.
Benjamin Barnes, the governor’s budget chief, said lower-than-expected income tax receipts and the drop in the Standard & Poor’s 500 stock index for the first nine months of 2015 prompted the reductions just three months into the state’s fiscal year.
The administration also announced that Connecticut must go forward with at least $15 million of a previously approved $20 million reduction in this year’s non-education aid to cities and towns.
Those cuts, Barnes said, would come from a program that reimburses communities for a portion of the funds they lose because state properties, colleges and hospitals are exempt from local taxation. But the budget chief also said those reductions were modified somewhat to lessen cuts to poorer communities.
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