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Connecticut Budget Deficit Projected at $27 Million

State Comptroller Kevin Lembo also says the state's economic recovery remains sluggish, Medicaid spending is on the rise and he's worried about sales tax revenues.

Escalating Medicaid spending and slow personal income growth is helping to fuel a projected $27 million state budget deficit, State Comptroller Kevin Lembo has reported.  

In a letter Monday to Gov. Dannel Malloy, Lembo said that general spending by the state next year is on track to be $80 million in the red. The state’s budget deficit, Lembo said in his letter, is higher than expected in part because Medicaid spending by the state’s Social Services Department is on the rise. That department’s budget, Lembo said, currently has a $100 million deficit and  added 1,700 new Medicaid cases in August, he said. 

The state ended the 2011-12 fiscal year with a deficit of $143.6 million. The deficit was paid down using the state's reserves.

Connecticut’s economy continues to make a sluggish recovery, Lembo said in his letter.

“In August, Connecticut lost 6,800 payroll jobs. For the full twelve-month period ending in August, the state has added a scant 1,100 jobs,” he wrote. “Since the recovery commenced at the beginning of 2010, Connecticut has regained about one quarter of the jobs lost to recession.”

In addition, the state’s unemployment rate rose to 9 percent in August, higher than the national rate of 8.1 percent, and Connecticut’s average hourly earnings were down 1.1 percent. Weekly private sector pay fell 1.4 percent, Lembo wrote.

While revenue from the state income tax has continued to show “positive movement,” the state’s earning losses, Lembo said, are worrisome.

“I am especially concerned with the sales tax trend in light of slower personal income growth in the state,” he wrote. “The state’s income growth ranking fell from thirteenth highest in the nation to thirty-fourth. Sales tax receipts have historically shown a correlation to personal income, so this trend is of concern.”

You can view a PDF of Lembo's letter above.

Paul Alexander October 03, 2012 at 03:11 PM
This is good news...IF...the Good Guv didn't pay more than the jobs will bring in. Politicians have a tendency to do that. Overspend to get the jobs in just to make those politicians look good. Charter is a well run firm led by savvy business people. If they decided to relocate those jobs to CT, rather than the long list of lower cost, right to work states, then they must have been compensated VERY WELL to make that decision. Somehow this smells like a taxpayer funded boondoggle to shore up Malloy's political prospects. And its only 200 jobs…going to the Good Guv’s former constituency of all places! Find out what the incentive package was before you start crowing Sully.
Paul Alexander October 03, 2012 at 03:12 PM
..and Sully...the article above is about the State's DEBT. Care to comment? Or will you go off on another ADHD inspired tangent.
Paul Alexander October 03, 2012 at 03:15 PM
AGP is correct. The “blame game” is pointless…other than giving Sully and all his Patch alter egos a reason to get up in the morning… The “blame game” just divides and keeps people from seeing the real enemy…DEBT, and those who keep piling it on us, our children, our grandchildren….(Pat and Dan) DEBT IS NOT MONEY! Repeat that until you understand it. (Pat and Dan) If you can’t pay for it with tax revenue, don’t buy it, do it, build it…(Pat and Dan) This… http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/09-2/Chart%20of%20the%20Day%20Debt%20Ceiling.jpg …has got to be reversed or everything falls apart; locally, statewide, and nationally.
Veritas vos liberabit October 03, 2012 at 03:19 PM
Debt - Economy - Jobs - Tax Revenue = ALL related, DUH !! Hows your bear market doing?
Barbara Field October 03, 2012 at 07:04 PM
Didn't the Pres. refer to Wall St. as fat cats? Where does the pension fund money go to provide retirement income--the bank with those "big" interest returns..so the Pres. takes credit for the surging stock market...what about the surging gas prices...didn't Pres. Bush get blamed when gas prices went up? I just heard Pres. Obama can't do anything about the rising gas prices? he's become an expert at passing the buck not stopping it at his desk--he's not at his desk to do that..too busy with his tv and singing career....what does everyone do when the shovel ready projects are completed...does everyone laid off from their retail or business related jobs expect to head out on the highway lookin' for one of those shovel ready jobs? Oh yeah, the Pres. had a chuckle over that..."guess they weren't as shovel ready as I told everyone"!! What happens when those defense cuts come on Jan. 1 to jobs in Connecticut...not to worry....there's plenty? of shovel ready jobs...fixing roads and bridges that no one can afford a car to get to a job that isn't there!!!

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