Malloy administration says cost-cutting has reduced CT budget deficit

Budget director Benjamin Barnes

mark pazniokas /

Budget director Benjamin Barnes

Gov. Dannel P. Malloy’s administration scaled back its deficit forecast Tuesday for the current fiscal year, citing additional savings in the Judicial Branch and in fringe benefit costs.

The Office of Policy and Management now is projecting a $41.6 million deficit for 2016-17, an improvement of $26.1 million from the nearly $68 million shortfall it reported one month ago.

This new deficit represents less than one-quarter of 1 percent of the General Fund, which covers the bulk of operating costs in the state budget.

Despite the deficit’s very modest size, there is some disagreement over the condition of Connecticut’s finances.

Both Comptroller Kevin P. Lembo and the legislature’s nonpartisan Office of Fiscal Analysis projected large deficits in their last reports.

OFA reported a shortfall of $77.5 million on Nov, 15 while Lembo, whose last forecast came on Nov, 1, pegged the deficit at $82.3 million.

Lembo, nonpartisan analysts and the administration also have warned that the state revenue picture remains volatile. OFA and the governor’s budget office must submit their next consensus revenue projection to the General Assembly on Jan. 15.

Lawmakers and the governor have much larger shortfalls to contend with when they begin crafting the next two-year state budget in early February.

Nonpartisan analysts say that state finances, unless adjusted, are on pace to run almost $1.5 billion in deficit in 2017-18 and $1.6 billion in the red in 2018-19. Malloy already has warned legislators he will not propose any major tax increases to help balance the books, meaning he also will recommend deep spending cuts.