Budget cuts enacted by Gov. Dannel P. Malloy last month to help close a nearly $100 million deficit will have about half the impact estimated, according to a Thursday report from nonpartisan fiscal analysts.
Malloy’s office estimated his rescissions would trim about $54.6 million from the state’s budget deficit, which they estimated at $99.5 million. But the Office of Fiscal Analysis, which pegged the deficit at $89.1 million, says Malloy only cut about $24.6 million from the deficit. That means he left about $64.5 million in red ink.
Analysts say Malloy’s cuts will be heavily tempered by losses in federal revenue and overlaps with existing lapses.
“For example: if OFA had been projecting a lapse in an account of $10,000 and that account received a rescission of $5,000, there would not be additional savings since the rescission was not larger than the already projected lapse and the agency would not have to achieve additional reductions to meet the rescission. This occurred in 52.6 percent ($28.8 million) of the rescissions implemented by the Governor,” the report reads.
Two cuts to the Department of Developmental Services could trigger about a $1.3 million reduction in federal revenue, OFA estimates.
Budget director Ben Barnes, the governor’s secretary of the Office of Policy and Management, released a statement Thursday afternoon calling the OFA projections “certainly reasonable.”
“While they differ from OPM by about $20 million, this difference between their projections and ours is a small share — less than 0.1 percent — of the state budget,” Barnes said. “We remain confident that the measures we have taken to date will allow us to be in balance on June 30, 2015. If circumstances change, we are prepared to take additional actions to ensure that outcome.”
Republican lawmakers have argued that the deficit is larger than either budget office is projecting. They have called for bipartisan legislative talks to address the budget. Incoming Republican leaders Sen. Len Fasano and Rep. Themis Klarides renewed that call in a joint statement pointing to discrepancies between OPM and OFA.
“Bottom line, we know we have a significant deficit, even after the governor’s rescissions. The longer we wait to address this problem in a productive bipartisan fashion the more hardship Connecticut taxpayers will face in the long run. The problem does not lie in our future. The problem is here and now and it’s time to work together to implement a long-term solution,” they said.