At the request of the House Republican caucus, nonpartisan legislative analysts reported this week that there is the potential for $83.8 million in deficiencies in the state budget, but Gov. Dannel P. Malloy said Friday that “on a net-basis we’re in great shape.”
The House Republican caucus had asked the Office of Fiscal Analysis to total up the deficiencies or areas in the budget where there could be potential cost overruns.
OFA’s Executive Director Alan Calandro reported that the state Department of Social Services was currently running a $40 million deficiency; Correction Department $10.5 million; Public Defenders $4.7 million; adjudicated claims $1.4 million; and healthcare for active and retired state workers, $27.2 million.
State Comptroller Kevin Lembo told the governor’s office and nonpartisan budget analysts in May to add $51 million to the healthcare budget for retired state workers because of the number of Correction Officers eligible to retire. At the time, Malloy’s Budget Director Ben Barnes said he doesn’t believe the Correction Officers will retire despite their eligibility because most are fairly young.
House Minority Leader Lawrence Cafero said Friday that it was predictable that the historical trends of running deficits in that account and other accounts would continue into the current fiscal year.
Typically, the state budget runs deficiencies throughout the fiscal year because of unanticipated costs. However, Cafero said the governor should have acknowledged the deficits and not played politics with the state’s finances.
“Some of the deficits were known by everyone because they had been cited previously and publicly. Others were anticipated and we just asked for the details,’’ Cafero said. “The administration is simply in denial.’’
On Friday, Malloy said he’s not surprised that “even on a cloudy day, Republicans want to make it cloudier.”
Malloy continued, “There are many budgetary lines in the budget, but on a net-basis we’re in great shape.”
Barnes also defended the budget projections Friday.
“The state budget remains balanced, with no deficit projected for the year,” Barnes said. “With respect to small deficiencies in individual agencies, we appreciate that there are some areas that deserve careful monitoring as the year develops, including those identified by OFA.”
However, Barnes said it is premature to identify specific agency deficiencies at such a small level — less than one half of one percent of the total budget.
“This is particularly true in Medicaid and healthcare areas which are subject to claims lag and fluctuation during the year that is well beyond OFA’s identified deficiency levels,” Barnes said. “Furthermore, we believe that any deficiencies that develop can either be mitigated through management action or offset by lapses in other accounts.”
On Oct. 20, Barnes projected the state budget would end the fiscal year with a $300,000 surplus. Lembo will certify the budget numbers on Monday.
Hugh McQuaid contributed to this report.