News From Kevin Lembo

COMPTROLLER LEMBO SAYS $93.9-MILLION DEFICIT WILL GROW IF BUDGET GRIDLOCK CONTINUES

Friday September 1, 2017 | Contact: Tara Downes 631-834-5234 | Tara.Downes@ct.gov

Comptroller Kevin Lembo today said the state, absent a budget for Fiscal Year 2018, is on track to end the year with a deficit of $93.9 million under the provisions of an executive order by the governor.

In a letter to Gov. Dannel P. Malloy, Lembo said the administration’s “untethered control” of discretionary spending – until the legislature adopts a budget – should allow him to achieve his targets, but prolonged legislative budget gridlock will have a devastating impact in the short and long term.

“The inability to pass a budget will slow Connecticut’s economic growth and will ultimately lead to the state and its municipalities receiving downgrades in credit ratings that will cost taxpayers even more,” Lembo said. “Connecticut’s economy continues to post mixed results across an array of key economic indicators. These results do not indicate that the state can grow its way out of the current revenue stagnation.

Lembo said that, as Governor Malloy noted in his executive order, the state’s ability to meet its spending obligations is impaired by the inability to enact a budget that provides for policy changes that increase revenue.

“This problem is exacerbated each month as potential sources of additional revenue are foregone due to the absence of the necessary changes to the revenue structure,” Lembo said.

Lembo said that expenditures through July – the first month of the fiscal year – were 10.1 percent higher than last year and reflect the problems that the state will face throughout the year. The double-digit increase is due to rising fixed costs, including debt and retirement costs.

Meanwhile, the state continues to experience a fluctuant pattern of job gains and losses.

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