Connecticut is only one month into a new fiscal year and already it’s running a $2.1 billion budget deficit. That’s the bad news. The good news is the state has a record amount in its rainy day fund.
“We are staring down the barrel at great uncertainty, and a potential budget deficit in the new fiscal year. But we have a level of reserves that will allow us to lean on them through the crisis to preserve programming,” State Comptroller Kevin Lembo says.
Lembo says Connecticut is one of four of five states with enough of a rainy day fund to weather the fiscal storm.
The $2.1 billion is simply a projection. The fiscal year doesn’t end until next June so there’s plenty of time to plug the hole, but the number is big enough to trigger deficit mitigation. Any shortfall that’s greater than 1% of general fund spending requires the governor to submit a deficit mitigation plan to the legislature within 30 days. This short fall is greater than 10%.
“If things continue to improve, if the vaccine’s in sight, if employment returns to normal levels, then we’ll be able to weather this storm without as much of a bump as some other states,” Lembo says.
Republican lawmakers are concerned that Lamont will use his executive powers to avoid sending the legislature a deficit mitigation plan.
“The rainy day fund that this caucus worked very hard to put those provisions in place with that volatility cap to have a $3 billion rainy day fund is going to disappear this fall without even a discussion by anybody,” Candelora says.
Lamont’s budget director Melissa Mccaw says that’s not the case.
“As required by state law the administration on behalf of the governor will have to respond to the statutory requirement as to what the administration’s plan is to balance the budget,” McCaw says.
“One of our main obligations is the state budget and that is being punted as well,” Candelora says.
Candelora hopes the governor calls them back into session to balance the budget.
“We’re in the middle of global pandemic and we’re going to need to balance our fiscal sustainability with the needs of the state,” McCaw says.