Republican legislative leaders call for special session on deficit

The top Republican legislators in the General Assembly called Friday for a special session to balance the budget, charging Gov. Dannel P. Malloy’s office with disclosing only half of the true deficit facing the state.

Senate Minority Leader Len Fasano, R-Derby, and his House counterpart, Rep. Themis Klarides, R-Derby, called for a session as soon as possible in a letter to the governor and leaders of the Democratic majorities in both chambers.

Malloy reported a $99 million shortfall last week in this year’s $19 billion budget. That’s only about 60 percent of the $175 million mark that would trigger a mandatory deficit-mitigation plan from the governor.

The governor has limited authority under state law to unilaterally reduce certain portions of the budget by up to 5 percent. Malloy rescinded almost $48 million in spending through this process on Thursday.

Under state law, though, the governor must develop a more detailed deficit-mitigation plan and submit it to the legislature for approval whenever the comptroller certifies a deficit equal to 1 percent or more of the general fund – which covers the bulk of operating costs in the overall budget. This year’s general fund stands at just under $1.75 billion.

“It is imperative that we act today to address the state’s impending deficit,” the GOP leaders wrote in their letter.

“When you look at all the numbers, the actual deficit could be far greater than what the administration has been reporting. Given the significance of this deficit, we are asking that the governor and legislative leaders work together to cooperatively resolve this financial emergency.”

The governor isn’t the only one projecting a shortfall below the $175 million threshold level.

The legislature’s nonpartisan Office of Fiscal Analysis actually reported a slightly smaller deficit, $89 million, last week.

Still, there are signs that the deficit could be larger.

Office of Policy and Management Secretary Benjamin Barnes, Malloy’s budget director, acknowledged earlier this week that the shortfall doesn’t take into account some areas that had been identified earlier as potential trouble spots.

One involves a last-minute decision by Malloy and Democratic lawmakers last June to assume that an extra $75 million in “miscellaneous” tax receipts would be collected this year.

And Comptroller Kevin P. Lembo, a Democrat, warned last spring that he believed the new budget was $52 million shy of the funding needed to cover all contractually mandated health insurance benefits for retired state workers.

Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, and Senate Minority Leader Martin M. Looney, D-New Haven, dismissed the GOP call for a special session.

“The governor is well within his executive authority to make rescissions to the state budget,” they wrote in a statement, “and both OPM and the nonpartisan OFA agree that the current projected deficit is far from the threshold that requires a special session. Calls for a special session are unnecessary at this time.”