It’s came as no surprise this week when Gov. Dannel P. Malloy’s administration reported the state budget was in balance.
What was far more surprising, though, was the added assertion there are no signs of cost overruns in any of the dozens of agencies supported by this year’s $19 billion budget.
For the first time in at least nine years, an administration reported no “deficiencies” that need to be tracked thus far into the fiscal year – a claim that Malloy’s critics attacked as extreme political spin in the final days of the campaign.
“This is typical Dan Malloy,” said state Sen. Robert Kane of Watertown, the ranking Republican senator on the legislature’s Appropriations Committee. “That’s what he does, make everything look rosier than it is.”
Kane noted that in a $19 billion budget, “cost overruns are everywhere.”
“Deficiencies” simply involve projected over-spending in an agency or departmental line item. Even in good fiscal times, the budget typically faces an average of close to $100 million in deficiencies. Even though these may be offset by projected surpluses in other departments, or by higher-than-anticipated tax receipts, they are nonetheless reported.
The governor must issue a budget assessment on the 20th of each month that covers projected surpluses or deficits while also outlining potential cost-overruns and estimated agency savings.
Malloy this week projected the same $300,000 surplus built into the budget when it was adopted last May. Surpluses in budget reports delivered during campaigns are nothing new.
But a review of monthly budget reports filed online and dating back to 2006, shows this is the only October report to claim there are no potential cost-overruns in any agency one-third of the way into the fiscal year.
Malloy’s predecessor, Republican M. Jodi Rell, wasn’t seeking re-election in October 2010, when she disclose $233.4 million in deficiencies. But in October 2006, just before she defeated Democratic challenger John DeStefano, Rell reported $15.1 million in potential cost overruns.
“We are not forecasting deficiencies because there is no basis on which to do so,” Gian-Carl Casa, a spokesman for the governor’s budget office, wrote in a statement Friday. “As in every month there are areas that are doing better than expected and others that are slightly behind, but there is nothing on which someone can make reasonable predictions of deficiencies.”
But the governor’s assertion is controversial given that state Comptroller Kevin P. Lembo – who like Malloy is a Democrat – warned last May there was a $52 million hole in the new budget.
Lembo had warned the administration those extra funds were needed to cover contractually mandated health care benefits. In particular, the comptroller noted that his office was projecting a surge in retirements among Connecticut’s prison guards and other Department of Correction staff.
“At this early stage in the fiscal year – less than four months in – we don’t have any significant concerns in the aggregate, but it’s very important that we keep our eyes on the ball,” Lembo wrote Friday in a statement, adding he also is watching certain delayed federal payments to Connecticut’s Medicaid account.
“I will continue to carefully monitor this issue, and any others that may arise as we get deeper into the fiscal year because revenue and agency spending patterns could change,” Lembo added. “Until then, spending is expected to grow modestly, and I’m hopeful that the latest jobs report is a sign that revenue – now expected to grow approximately 2.6 percent — will continue to head in a positive direction.”
The October budget report is particularly important because it traditionally is the focus of a November meeting by the Appropriations Committee.
With the administration reporting no trouble spots, Sen. Beth Bye, D-West Hartford, co-chairwoman of the Appropriations Committee, said the mid-November meeting likely won’t be held.
When asked about the likelihood of no significant cost overruns in a state budget that began on July 1, Bye said Thursday that “there are different reasons why different people might report different things. What it does is show a need for more transparency in the budget.”
“We know for a fact that retirement health care has not been included, and unless (retiring prison guards) are not receiving any health benefits, then it is a deficiency,” House Majority Leader Lawrence F. Cafero, R-Norwalk, said Friday.
Cafero added that the governor “has ignored these deficiencies for purely political reasons. We know from the very person he submitted this report to that it is untrue.”