Ctnewsjunkie file photo
Office of Policy and Management Secretary Ben Barnes (Ctnewsjunkie file photo)

HARTFORD, CT — Two months into the new fiscal year and Connecticut — without a two-year budget in place — is facing a $94 million budget deficit, according to the governor’s budget office.

The numbers will only get worse as the situation continues.

Gov. Dannel P. Malloy has been operating the state through executive order since July 1. But he has a limited ability to curtail spending, even with the $1.57 billion labor concession package in place.

That’s because most of the budget is largely fixed by contract or federal entitlement rules.

In order to offset the projected deficit, the Office of Policy and Management Secretary Ben Barnes said they would transfer $94 million from the Municipal Revenue Sharing Account, which is funded by a half percent of the state sales tax. However, they said that this will require legislative action.

Legislative leaders have been bickering about how to resolve the two-year, $5.1 billion budget deficit since April when revenues plummeted, leaving them with few good options.

Democratic legislative leaders voted largely along party lines to approve the $1.57 billion labor concession package in July. However, that still left them with a $3.5 billion budget deficit and a proposal from Gov. Dannel P. Malloy that would cut municipal spending, in addition to further social service cuts.

State Comptroller Kevin Lembo will release his own report on the budget situation on Sept. 1.

Legislative leaders from both parties are expected to meet later today to determine whether they’re any closer to an agreement.