Lembo confirms CT budget is $45M in the red after governor’s cuts

After applying Gov. Dannel P. Malloy’s recent emergency budget cuts, state finances are on pace to finish nearly $45 million in deficit, Comptroller Kevin P. Lembo reported Monday.

The comptroller’s shortfall projection of $44.8 million also reflects declining gaming receipts and federal Medicaid and other grants — problems also identified by the governor’s budget office and by the legislature’s nonpartisan Office of Fiscal Analysis.

“I am deeply concerned that this significant decline in federal revenue was not identified earlier in the fiscal year,” Lembo said.

Though the administration, working with the comptroller’s office, has developed an automated grant process and central database, Lembo added, “We need to build on this work to create improvements and greater transparency with respect to federal revenue billing and claims.

“It is critical that we have timely and accurate reporting of all planned and realized federal claims during a fiscal year. A recurrence of last month’s shortfall projection is unacceptable and prevents me from accurately reporting on the state’s financial condition. I would like to, again, offer my support in working toward a process that will better identify potential federal claims problems as we move forward.”

The deficit forecast represents roughly one-quarter of 1 percent of the General Fund, and falls about $130 million short of the statutory level that would compel the governor to submit a mandatory deficit-reduction plan to the General Assembly.

The governor used his statutory authority to impose a limited degree of budget cuts unilaterally last month.

Much of the $48 million in reductions Malloy ordered affected social services, health care and operating grants to public colleges and universities.

The governor also asked the Legislative and Judicial branches and the state’s watchdog agencies – which are exempt from emergency cuts – to voluntarily accept another $7 million in reductions.

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