Comptroller Wyman Concerned About Possible Federal Cuts
|Contact: Bob King|
|860-702-3311 or 860-702-3300|
State Comptroller Nancy Wyman expressed deep concern today over a Presidential candidate's recent economic proposal and its potential effects on the state budget and the state's fragile economic recovery. According to Wyman, Connecticut is just beginning to ride the national tide of economic growth, and the plan under discussion would jeopardize the progress the state has made.
Wyman said she wondered whether programs such as Medicaid could be cut under the plan and added that a proposed cut in the capital-gains tax could cost the state an estimated $50 million in annual income tax revenues. If the plan mirrors a recent proposal that passed in Congress, the capital-gains change would cut reportable capital-gains income by half, reducing the amount on which some residents pay income tax and leaving other state taxpayers to make up the difference.
While the plan itself is vague on specific spending reductions, Wyman said cuts in federal grants for the state's Medicaid program could be problematic. "About 82% of our state's $2 billion annual Medicaid total is dedicated to care for the elderly and disabled, including funding for nursing homes and other long-term care," Wyman said. "Cutting federal grants to Medicaid only passes the burden onto the state. Our citizens will still need the care." Other programs that could be cut include Pell college grants, environmental programs and job assistance for dislocated workers.
Wyman said that under the current administration in Washington, great strides have been made in reducing the federal deficit, which now stands at its lowest percentage of the GDP in 10 years. This in turn has stimulated the economy through lower tax rates, and the long national recovery is now just beginning to be felt in Connecticut.
Finally, Wyman said that although her office has projected a $228 million surplus for the last fiscal year, she is still concerned about the current fiscal year. She issued a "Watch List" in January citing specific areas that her agency will be monitoring for shortfalls, including federal aid, which amounts to 16 percent of the state budget. "We have a precarious situation with our own state budget for this year," Wyman said. "Any move on the part of the federal government to downsize aid to states only exacerbates the problem."
For Immediate Release
August 7, 1996
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