Office of Policy and Management Secretary Ben Barnes told the legislature’s two budget writing committees Wednesday that he regretted a comment he made back in 2014 following the re-election of his boss, Democratic Gov. Dannel P. Malloy.
In a meeting with reporters back in November 2014, Barnes said the state was in “a period of permanent fiscal crisis.”
Barnes said it was a quote from David Osborne, a public sector financial management expert.
“I don’t believe that the state is in any kind of a crisis,” Barnes told lawmakers Wednesday. “I believe we face challenges and will continue to face challenges and that the changing nature of our economy makes it very difficult to operate government services on the types of tax bases that we have.”
However, Barnes said the General Assembly and the governor have come together to meet those challenges and he has every reason to believe they will in the future.
Barnes and his counterparts at the legislature’s Office of Fiscal Analysis presented the Appropriations and Finance Committees with their budget projections for the next few years. The estimates show the state budget running a $4.3 billion deficit over four years.
“I find that the concept of out-year budget projections . . . are useful in identifying the challenges that we will have to deal with,” Barnes said. But “creating an out-year picture that is as bleak as possible is of limited value to anyone who is looking at it.”
Barnes said the only way those deficits will exist past the third year is if the state does nothing in the next two years. Since the state must balance its budget every year it’s likely those deficits won’t exist.
However, the state would have ended fiscal year 2015 with a small $113.2 million deficit if lawmakers hadn’t balanced the budget with money from the Budget Reserve Fund (BRF).
Barnes also expressed regret over that deficit as well, saying he wished he had done more to end the year in the black. Regardless, he said he sees no need for pessimism about the state budget or the economy.
Barnes said Connecticut has a much stronger economy than was suggested by some lawmakers Wednesday. He said nobody is happy with its performance over the last 8 or 9 years coming out of the recession, but Connecticut’s structure and the maturity of the state’s economy make it more difficult. He pointed out that Connecticut is not an oil-rich state and is positioned to recover slowly, as it normally does from a recession.