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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 02, 2012 at 02:00 PM
These people should all be fired/indicted/tarred and feathered for malfeasance. The LARGEST tax increase in CT history AND there is a huge budget deficit? AND not one word from the Comptroller about needing to reduce state spending??? There WILL be another HUGE State tax increase. Newtown taxpayers need to understand this because if Newtown approves a budget increase in the spring then you are just gonna get double tapped by the State in the summer. NO NEW TAX INCREASE FOR NEWTOWN. The State will be getting enough. Let the State "Redistribute" to the municipalities.
Paul Alexander October 02, 2012 at 02:02 PM
Why do the taxpayers of Connecticut just sit back and take this??? Fight back! The State and the Town are robbing your families and your businesses.
Paul Alexander October 02, 2012 at 02:10 PM
80 MILLION in the red next year!!! 80 MILLION. Do you really think the politicians will just say, "Oh well, I guess we need to cut back to cover that". No way. There is a HUGE problem in Hartford. They want the AUTHORITY and the RESPONSIBILITY to run the state's finances, but when they screw it up they pass the ACCOUNTABILITY of THEIR screw up on to the taxpayers. It doesn’t work that way. Authority, Responsibility and Accountability are a package deal. If the politicians want the Authority and Responsibility then THEY get the Accountability and that means cutting spending...not foisting another tax increase on families and business owners.
Paul Alexander October 02, 2012 at 02:25 PM
Connecticut is nearing cash flow insolvency. Period. There is a significant financial crisis in Connecticut’s near future. More families and businesses will leave. The tax base will fall. State and municipal governments will spend more with a lower tax base. More families and businesses will leave. The tax base will fall more…..Connect...the...dots. Anyone who believes that families and businesses are leaving because the State and the town don't spend enough money should have their heads examined.
Eric Larson October 02, 2012 at 03:48 PM
Do not forget the unfunded liabilities the state has accured. I believe it to be around $32 billion, most in pension/ retirement benefits for state workers and teachers.
Veritas vos liberabit October 02, 2012 at 04:10 PM
Shouldn't you be paying more attention to the stock rally that you missed, and not worry about a state where you don't live? While the S&P 500 has more than doubled in value from the March 2009 lows, investors have withdrawn nearly $500 billion from U.S. stocks during that same time period. This year alone, they've pulled more than $100 billion from U.S. stock mutual funds and ETFs.
Paul Alexander October 02, 2012 at 04:13 PM
Sully, WTH does your comment have to do with the article??? Back on your meds dude. Oh, and do you care to comment on the article and perhaps even make a cogent point?
Paul Alexander October 02, 2012 at 04:24 PM
BTW Sully...didn't miss anything. Had a record year. And I only do well when the clients do well.
Paul Alexander October 02, 2012 at 04:48 PM
What is amazing to me is that the Patch article on Best Back to School Photo stayed up for days and generated 300+ comments. An article on the Best Pizza Joint....everyone wants to comment. But an article foreshadowing either the State's fiscal implosion or a humungous State tax increase generates little to zero interest.
Veritas vos liberabit October 02, 2012 at 05:03 PM
Sure you did.... Paul Alexander 9:55 am on Monday, April 2, 2012 The US Monetary base has grown 210% since January 2008. It's a Potemkin market rally, nice as it has been, engineered by a Potemkin President. You better know when to sell.
Paul Alexander October 02, 2012 at 05:09 PM
Where in that comment does it say I missed the rally? My comment speaks to THE SOURCE of the rally, that it has been "Nice", and that It won’t end well. No timing comment in there dude. No comment that I am out of the market. You're starting to worry me Sully. And you're getting mighty "stalker-ish". Stop obsessing about me and start obsessing about the State’s and Town’s finances.
Big Family October 02, 2012 at 07:35 PM
California here we come! These people NEED to GO! from Malloy right on down the line. To all of you who want the town budget increased so home values will improve, it won't matter what the budget is if people don't want to live in the state. We have to have 0% increases.
Daniel Patti October 02, 2012 at 11:50 PM
"There are risks and costs to action. But they are far less than the long range risks of comfortable inaction. " -John F. Kennedy
Big Family October 03, 2012 at 12:34 AM
The risks of Gov Malloys actions are far more costly than if he would just STOP! And his long range risks are as frightning as President Obama's. There is nothing comfortable about it.
Dean Mulligan October 03, 2012 at 01:25 AM
BF - did you enjoy the great recession brought on by 8 years of Bushie?
Big Family October 03, 2012 at 01:54 AM
Ming, When will you and yours decide that President Obama is resposible for where we are now? If he has four more years and things don't "hope and change" then he just ran out of time? "Three years to turn this around or it's a one year proposition"
Big Family October 03, 2012 at 02:18 AM
Sorry, I ment a one term proposition. My bad.
A. G. P. October 03, 2012 at 12:53 PM
WHERE ARE WE GONNA GO, CHICAGO?
A. G. P. October 03, 2012 at 01:08 PM
THEY have us picking over nits. Pres O-Bush-ma has been moving this country in the same direction for 12 yrs. The only CHANGE was Ron Paul, but the D's and the R's blacklisted him because he would have derailed their gravy train.
Paul Alexander October 03, 2012 at 01:56 PM
Go? No, no,no. Resist the "Flight" reaction and go with FIGHT. "They'" HATE resistance. "They" COUNT on passivity. Start resisting their policies and start electing local and state politicians that are fiscally responsible and accountable.
Veritas vos liberabit October 03, 2012 at 03:01 PM
Looks like CT is not quite dead, despite the Doom and Gloom crowd here. Congrats Gov Malloy. Oct 1 2012 STAMFORD -- Charter Communications will relocate its corporate headquarters from St. Louis to 400 Atlantic St., a move expected to bring 200 high-level jobs downtown. The Fortune 500 company will join UBS Financial Services and Harman International in the 15-story high-rise, which is owned and managed by the Landis Group. The move, confirmed by Gov. Dannel P. Malloy's office Monday, is part of his First Five program, which offers incentives to companies that boost jobs or move to the state. Read more: http://www.stamfordadvocate.com/news/article/Charter-relocating-headquarters-to-Stamford-3910197.php#ixzz28FSP1C7x
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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