Deficit Improves, State Need Increases

The new year is already starting off on a better note for the state. We’re only $513.3 million in the red. It’s good news because  it’s $36.2 million less than officials thought, State Comptroller Nancy Wyman said on Monday.

The financial help came partly through the Treasurer’s sale of unclaimed property, which brought in $58.4 million to help mitigate the $39 million drop in sales tax and a $10 million drop in collection of the tax that corporations pay on profits.

When all the numbers are crunched, Wyman expects the state to end the year about $212 million below original estimates after losing more than 88,000 jobs since the recession began in March 2008.

The payroll tax makes up about 65 percent of the state’s total  income tax receipts. This year, receipts are expected to be about $6.4 billion.

“Until the state stops losing jobs and the payroll taxes that go with them, this deficit will continue to present difficult challenges for policymakers,” Wyman said.

The $513.3 million deficit figure is based on a budget of $18.6 billion for the fiscal year that ends June 30, 2010 but the governor’s budget office projects a deficit of $327.9 million.

As deficit numbers improve slightly, the state is seeing more people turning to state government for help for food, medical care and financial support, according to Gov. M. Jodi Rell. And enrollment is higher in a wide range of programs run by the Department of Social Services.

For nine DSS programs, enrollment was up 18 percent in one year, Commissioner Michael P. Starkowski said.

“Enrollment is booming in Food Stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP, as well as in the HUSKY health care program for children and eligible parents,” Starkowski said.  “We have also experienced significant growth in State-Administered General Assistance, which helps single, unemployable people struggling to make ends meet.”

Here’s a glimpse of increased demand for state aid. 

  • SNAP/Food Stamp: 295,600 Connecticut residents received benefits in November 2009, up 32 percent in one year and 58 percent in five years.
  • Medicaid :445,700 received coverage in November 2009, up 7 percent in one year and 33 percent in five years.
  • Temporary Family Assistance, or family cash welfare, dropped from 57,000 families in 1995 to under 18,500 in November 2008, but has risen to 19,689.
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