News From Kevin Lembo

COMPTROLLER LEMBO PROJECTS $198.5-MILLION DEFICIT

Thursday March 1, 2018 | Contact: Tara Downes (860) 702-3308 | Tara.Downes@ct.gov

Comptroller Kevin Lembo announced today that the state is currently on track to end Fiscal year 2018 with a deficit of $198.5 million.

In a letter to Gov. Dannel P. Malloy, Lembo said that this deficit projection is slightly higher than the Office of Policy and Management’s (OPM) projection due to a larger anticipated deficiency in the state’s Adjudicated Claims account – the account responsible for paying the ongoing SEBAC v. Rowland claims, related fees and other state settlements.

“The deficit has receded from last month through a combination of revenue adjustments and spending restraints, including ongoing savings associated with the recent implementation of the Medicare Advantage Program for retired state employees and dependents,” Lembo said. “Adopting Medicare Advantage was part of the SEBAC 2017 agreement and is currently saving approximately $11 million per month – with an overall savings projection of $135 million in Fiscal Year 2019. General Fund estimated revenues also increased by $17.8 million this month based on a legislative change that canceled a planned transfer of resources from FY 2018 into FY 2019 that was part of the enacted budget.

“Connecticut’s overall budget results are ultimately dependent upon the performance of the national and state economies and there are economic indicators – both good and bad – that deserve close attention, including manufacturing growth, consumer confidence, as well as consumer debt and savings patterns.”

Key labor data will not be released until next week. Until then, Lembo highlighted promising growth in the finance and insurance, durable goods and manufacturing, and information services sectors. He also noted that consumer confidence surged this February to its highest level since November 2000 – although he warned that consumer debt has also risen, while savings has diminished.

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