Republican legislative leaders in the House and the Senate are asking Democratic Gov. Dannel P. Malloy’s administration to explain the discrepancy in revenue figures his office reported in September.
“There’s three issues here,” Senate Republican leader Len Fasano, R-North Haven, said Monday. “One we’re going to have a deficit. Two, there was a clear attempt to try and hide that deficit from the public. And third, we need to find out why these revenue figures are not in sync.”
There’s also a $30 million unexplained difference in revenue between the numbers Malloy’s budget office reported on Sept. 6 and the revenue estimates released last week by the nonpartisan Office of Fiscal Analysis. OFA projected that the state was facing a $77.9 million deficit.
Malloy’s budget office has yet to officially project a deficit in its monthly letter to state Comptroller Kevin Lembo, even though it told its agency heads in a Sept. 6 letter that its budget was likely more than $130 million in the red.
Republican legislative leaders called for the informational hearing at a Legislative Office Building press conference Monday. Fasano said they would ask Lembo, Office of Policy and Management Secretary Ben Barnes, and officials from the Office of Fiscal Analysis to testify and answer questions.
“We are seeing a pattern of not being truthful,” House Republican leader Themis Klarides, R-Derby, said Monday.
She said there’s all these deficit numbers out there now.
“What are we supposed to do? Just pick the one we like?” Klarides said.
Chris McClure, a spokesman for Malloy, dismissed the Republican press conference calling for an informational hearing as “loaded with hyperbole.”
“While we appreciate Sen. Fasano and Rep. Klarides’ attempts to make news and alter the political landscape for their Trump-immolated party, the truth is that writing, passing, and keeping a budget balanced throughout the year requires a lot of hard work and hard decisions,” McClure said, pointing out that if the Republican budget had passed it would be $112 million in the red.
McClure said Republicans don’t want to have a serious conversation, “they just want to change a political narrative that isn’t working for them.”
Republican legislative leaders have not called Barnes to ask privately about the discrepancy, which the administration says points to their political intentions.
House Speaker Brendan Sharkey, D-Hamden, echoed McClure’s remarks.
“This is typical Republican rhetoric, just like what we are hearing from their own desperate presidential candidate Donald Trump, they don’t like the numbers so they claim the system is rigged,” Sharkey said. “With no credibility left, it’s not surprising the minority party is only left to point fingers and flail in the wind.”
Adam Joseph, a spokesman for the Senate Democratic caucus, said he’s skeptical Republicans want to have a serious discussion about the budget. Besides, in less than one month legislative budget analysts and the governor’s budget office are “legally required to issue consensus revenue estimates and we should follow that process.”
But Republicans aren’t the only ones seeking answers.
State Comptroller Kevin Lembo wrote Barnes, Malloy’s budget director, last week expressing his concern about the discrepancy between the Sept. 6 and Sept. 20 numbers and requesting an answer.
“The contradicting forecasts deserve an explanation in order to preserve confidence in the state’s official financial statements,” Lembo wrote to Barnes.
In response, Barnes said they use their best judgment regarding the status of the budget when they submit their reports on a monthly basis to Lembo’s office and last month was no exception.
“We monitor revenues on a daily basis and regularly consider the impacts of economic and financial events and trends on our near and long term revenues,” Barnes said. “This analysis typically leads us to identify likely ranges of outcomes — and the information in our letter to agencies asking for budget options was based on a scenario extremely conservative revenues. It is essential that the governor have a variety of significant budget reduction options to consider as he develops a budget recommendation for the coming biennium. The forecast we used was appropriate to that goal.”
The state Comptroller’s office used to have a greater ability to independently verify the numbers coming from the governor’s budget office, but that all changed in 1991. Now, the comptroller only has the ability to accept the numbers the Office of Policy and Management gives him on a monthly basis. While his narrative about those numbers can offer opinion, the actual revenue and expenditure numbers reported to Wall Street bond rating agencies about the state’s fiscal health have to be the governor’s numbers.
Republicans said they would be open to changing that.
Fasano said he’s read the legislative history and it’s unclear why lawmakers decided to make those changes.
He said he would like to hear about the possibility of giving the comptroller’s office more power to do its own research regarding revenue projections.
Lembo said he’s open to a discussion about the monthly reporting requirements in which he’s asked to certify the numbers Barnes gives him, but now might not be the right time.
“The timing of this discussion is certainly interesting, and probably not the most productive three weeks before an election,” Lembo said. “Some of the state’s financial reporting policies have been on the books for 25 years! However, I am always open to an in-depth conversation about how the state prepares its financial reports.”
