The governor has announced more than $102 million in budget cuts because of volatility on Wall Street and uncertainty about the future, according to a statement from the office of police and management.
The governor has cut $99.2 million from executive branch agencies, while legislative leaders have been asked to cut $420,000 and the judicial branch had been asked to cut spending by and $3.1 million, which amounts to half a percent of their appropriations, according to the news release.
“OPM’s estimate of capital gains has decreased for the current fiscal year, and it would be reckless to expect these revenues to grow when the S&P 500 is down more than 6% since May,” OPM Secretary Ben Barnes said in a news release. “Only once since 1994 have we seen positive capital gains revenue growth when the market was down.”
“Conversely, five times in the last 20 years a down market has led to significant revenue drops. That’s why we’re taking these smart, strategic, proactive steps. We need to ensure that spending matches the revenue we take in – and we’re always working to plan ahead. While not everyone will be pleased with these decisions, this is the right thing to do to keep our state budget balanced,” the news release says.
Speaker of the House Brendan Sharkey, D-Hamden, released a statement in response to the cuts.
“I’m disappointed and certainly opposed to what appear to be cuts targeting some of the very areas we sought to protect in the budget. Under our budget agreement, the bipartisan MORE Commission was charged with identifying additional municipal savings, and they haven’t been given the opportunity to do so yet. We also agreed to restore hospital funding the governor proposed to cut, and so these renewed cuts will very likely impact the delivery of healthcare services. Though the governor has the authority to make these cuts at this time, the legislature will continue to monitor the status of the budget, and look to mitigate these cuts next session,” the statement says.