The legislature’s nonpartisan Office of Fiscal Analysis came out with new budget estimates Thursday that put the state budget deeper in the red than initial projections.
Legislative budget analysts briefed lawmakers on Thursday morning.
They estimated the state would end the year with a $266 million deficit this year and a $339.4 million deficit next fiscal year. That’s as long as lawmakers cut the $560 million in spending Gov. Dannel P. Malloy asked them to cut on Feb. 3. If they don’t, the gap would be closer to $900 million.
OFA’s numbers are much larger than numbers reported less than a week ago by Malloy’s budget office, which estimated the state budget was on track to end this fiscal year with a $19.9 million deficit. Last month, OFA estimated the state would end the year with a $72.2 million budget deficit, but the state’s fiscal picture has changed significantly since that time.
The governor’s budget office took the new downward projections in stride.
“Projections are going to vary from one set of numbers to another,” Gian-Carl Casa, undersecretary for legislative affairs, said. “But what we should all agree on is that this is a new economic reality that requires a different solution. We hope that solution will happen in a bipartisan manner.”
The numbers are driven largely by revisions to the state’s personal income tax estimates and Republican lawmakers aren’t buying the argument that the drop is due solely to the stock market’s performance in 2015.
Senate Minority Leader Len Fasano, R-North Haven, said the stock market dipped in July, but the estimated personal income tax payments in October were ok. Then the stock market was fine in December, but estimated personal income tax payments dropped in January.
“I don’t believe it was the stock market,” Fasano said.
He said the only logical conclusion is that “these are folks who have left the state.”
If Fasano is right and Connecticut’s high-income earners are leaving the state, it means the state will be seeing a larger drop in personal income tax revenue in April. Around 40 percent of revenue is collected during April.
But Fasano didn’t necessarily blame Malloy for the problem. He blamed the legislature’s Democratic majority.
“The Democratic majority is incompetent to run the fiscal ship of this state,” Fasano said.
He said the numbers released Thursday are “shocking.”
Senate President Martin Looney, D-New Haven, said they will do what is necessary to balance the budget.
“Today’s projections reinforce the need to find additional efficiencies and savings across government,” Looney said. “That’s why we have already made structural changes to save half a billion dollars over the next two years.”
Majority Leader Bob Duff, D-Norwalk, said even though the state continues to add jobs, its economy isn’t growing as fast as expected.
“One only needs to look at the stock market averages to see the challenges we face,” Duff said. “We have always worked to make the right decisions for the long-term and we will stay focused on meeting the needs of our citizens in the most efficient and effective way possible.”
But Republicans aren’t convinced that’s what is happening.
“We are scared to death,” by these numbers, House Minority Leader Themis Klarides, R-Derby, said.
She said her Democratic colleagues must go to bed every night and hope the revenue figures are coming in higher than everyone says they’re coming in.
“And in that hope, they spend money,” Klarides said. “They spend money based on a hope and a prayer.”