Updated with additional comments at 3:15 p.m.
Republican legislative leaders called Monday for immediate hearings on the state budget deficit controversy — and reform of a little-known law that compels the comptroller officially to confirm the governor’s budget’s projections.
Comptroller Kevin P. Lembo, sensitive to the politically charged nature of the budget debate just weeks before Election Day, left the door open for more talks. But Lembo declined to take a stand Monday on whether he should be freed from having to automatically affirm the budget projections of Gov. Dannel P. Malloy’s administration.
The budget hearing and restoration of the comptroller’s full oversight powers were proposed by Senate Minority Leader Len Fasano, R-North Haven, and House Minority Leader Themis Klarides, R-Derby.
“The Malloy administration had an obligation to present an accurate assessment of the state’s fiscal health, and it provided misleading information,” Klarides said. “We need to have the Office of Policy and Management secretary [Ben Barnes] come before the legislative oversight committees and explain himself and tell us how and why his numbers conflict with the nonpartisan Office of Fiscal Analysis. … Something doesn’t smell right.”
Nonpartisan analysts — responding to a request from GOP legislative leaders — estimated the General Fund for this fiscal year is about $78 million in deficit, a shortfall of nearly one-half of 1 percent.
That came on the heels of a report in The Mirror that the administration had warned agency heads on Sept. 6 of a projected revenue shortfall of $133 million this fiscal year.
Two weeks later, on Sept. 20, the administration wrote in its official budget report to Lembo that the current budget was in balance and that “our revenue forecast remains consistent with the budget plan.”
The administration later explained the conflicting data by saying it used “extremely conservative” revenue estimates in the memo, which was directing agency heads to be frugal.
“Who can the public trust? What can they believe?” Fasano said Monday. “His numbers behind closed doors show a significant deficit and serious financial issues lawmakers should be talking about fixing now. But on the surface, he shared a much rosier picture that matches the ‘all is well’ line we’ve been hearing repeatedly from Democratic lawmakers. That kind of doublespeak is infuriating.”
Lembo wrote to Barnes, the governor’s budget chief, last week, saying that, “The contradicting forecasts deserve an explanation in order to preserve confidence in the state’s official statements.”
Malloy downplayed the deficit forecast last week, and the administration and House Democratic leadership charged Republicans Monday with political grandstanding in election season.
“Another day, another Republican press conference loaded with hyperbole and demonstrating an alarming ignorance of the state budget,” Malloy spokesman Chris McClure said Monday. “While we appreciate Senator Fasano and Representative Klarides’ attempts to make news and alter the political landscape for their Trump-immolated party, the truth is that writing, passing, and keeping a budget balanced throughout the year requires a lot of hard work and hard decisions.”
McClure added that the Republican budget proposal for the 2016-17 fiscal year would face a $112 million shortfall based on current revenue projections. That plan was issued on April 25, though, before the administration and nonpartisan analysts completed their final revenue forecast of the regular 2016 legislative session.
House Democratic leadership decried the call for a budget hearing as an act of political desperation.
“This is typical Republican rhetoric, just like what we are hearing from their own desperate presidential candidate, Donald Trump. They don¹t like the numbers so they claim the system is rigged,” House Speaker J. Brendan Sharkey, D-Hamden, said. “With no credibility left, it’s not surprising the minority party is only left to point fingers and flail in the wind.”
Republicans counter that the Democratic governor is playing his own election season games, hiding budgetary red ink until after the election to help Democratic legislators at the polls this fall.
“Please forgive my skepticism that, three weeks before an election, the Republican leaders want to have a serious discussion about the budget when they have consistently failed to offer any real solutions,” Senate Democratic spokesman Adam Joseph said. “In less than one month, the nonpartisan Office of Fiscal Analysis and the Office of Policy and Management are legally required to issue consensus revenue estimates, and we should follow that process.”
Unmuzzling the comptroller
And while Fasano and Klarides said Barnes, Lembo and nonpartisan analysts should appear before the legislature’s budget committees to discuss the matter, they added that isn’t the only solution needed.
Republican leaders also urged Lembo, Malloy and the legislature to go into the history books and revisit Public Act 91-14 — which some state officials refer to as the “muzzle bill.”
The Democrat-controlled 1991 legislature — in an accommodation to then-Gov. Lowell P. Weicker Jr. — stripped the comptroller’s ability to modify the administration’s monthly budget forecast.
This forecast is shared with bond investors, Wall Street credit-rating agencies and others that review the official financial statements of state government.
The comptroller still is free to issue non-binding comments about the budget forecast in its monthly report, but is compelled by law to certify the governor’s numbers in Connecticut’s official statements.
Fasano and Klarides questioned Monday whether it was proper to represent to the public that the comptroller has certified numbers that he is powerless to reject.
In other words, can there be mandatory independent confirmation, or is that logically impossible?
“We need an honest report,” said Fasano, who said Lembo’s role in the monthly budget review process is — in large part — reduced to that of a scribe who simply transmits to the public what the governor says. “The comptroller should be given some latitude to look at these numbers and verify these numbers,” he said.
Lembo was cautious Monday in his response to this proposal.
“The timing of this discussion is certainly interesting, and probably not the most productive three weeks before an election,” he wrote in a statement. “Some of the state’s financial reporting policies have been on the books for 25 years. However, I am always open to an in-depth conversation about how the state prepares its financial reports.”
Lembo wasn’t the only Democrat who was reluctant to say much about restoring the oversight powers of the comptroller’s office.
The Malloy administration did not comment on the proposal at all.
And neither House nor Senate Democratic leadership would take a position on whether the comptroller should have to automatically certify the governor’s budget projections.
House Democratic Caucus spokesman Gabe Rosenberg would say only that “the appropriate time and place to contemplate major budgetary reporting changes is during the regular session and through the public hearing process, not in desperation, to boost flailing political campaigns, on the eve of an election.”
And Joseph added on behalf of Senate Democrats that, “That’s an issue that could be considered when the next legislature is seated.”
Democrat Bill Curry, who served one term as comptroller starting in 1991 and who was the Democratic gubernatorial nominee in 1994 and 2002, said Lembo should have the authority that was stripped from the state’s fiscal watchdog 25 years ago.
“The comptroller is the chief financial officer of the state,” Curry told The Mirror in an interview last week. And even though the comptroller still can use the bully pulpit to disagree with the governor, being required to rubber stamp the governor’s budget projections in the official statements of the state “is antithetical to the very idea of a comptroller. It ensures bad government.”