Democrats and Republicans don’t want to acknowledge that their plans share two common weaknesses — economic risk and a lean rebuilding program.
Gov. Ned Lamont is looking to the past as he weighs a GOP plan to raid the rainy day fund to jumpstart the state’s cash-starved transportation program.
By the end of the new budget cycle, the state could have a $3 billion reserve, which is three times the size of the cushion it built in the early 2000s.
Ned Lamont’s biggest challenge as governor is likely to be devising and then selling fellow Democrats in the General Assembly on the “structural changes” he says are necessary to break Connecticut’s cycle of chronic budget deficits.
Gov. Dannel P. Malloy outlined a compromise path Thursday that would allow Gov.-elect Ned Lamont to modestly tap Connecticut’s reserves to avoid tax hikes — and still leave a sizable fiscal cushion to guard against the next recession.
Next month Connecticut will post its largest emergency budget reserve in a decade. But Connecticut only ranks in the middle of all states when it comes to amassing a fiscal cushion against the next economic downturn.
After three consecutive years of draining its emergency reserves, state government is on pace to deposit nearly $780 million in its rainy day fund.
An anticipated surge in state income tax receipts has bolstered Connecticut’s emergency reserves to nearly $900 million. But it remains unclear how much of that windfall is lasting — and how much is only an advance payment of funds Connecticut otherwise would receive in mid-April.
The Senate unanimously approved a plan Tuesday evening to cover the $317 million state deficit in the current fiscal year — albeit by draining most of Connecticut’s modest emergency reserve.
Senate Democrats unveiled a new plan Thursday to stabilize future state budgets years from now, offering a plan similar to one enacted into law just two years ago. The benefits might nor arrive for many years.
Less than one month after Gov. Dannel P. Malloy and legislators closed a $220 million deficit in the budget that ends June 30, eroding tax receipts helped punch a new $141 million hole in finances, the administration reported late Wednesday. The last-minute shortfall in the outgoing budget threatens to intensify a bitter, fight over how to balance the next state financial plan.
Gov. Dannel P. Malloy struck a conciliatory tone Tuesday a day after House Speaker J. Brendan Sharkey likened his latest budget proposal to “a personal hit list,” conceding legislative leaders have a difficult task building a consensus around deep spending cuts. But the governor remained at odds with the Democratic legislative majority leadership over how to close a $930 million budget gap before the session ends May 4.
Gov. Dannel P. Malloy warned Friday that the spending plan he will offer state legislators next week will be a “very austere” budget with no tax hikes. The Democratic governor, who needs to close a deficit projection topping $500 million in the preliminary budget for 2016-17, also all but ruled out use of the state’s modest emergency reserve.
The red ink legislators and Gov. Dannel P. Malloy must deal with beginning next week now outstrips Connecticut’s emergency reserves by almost $175 million, based on a new deficit forecast released late Monday.
Despite having a relatively modest emergency budget reserve right now, Connecticut’s saving strategy is better than those in most states, according to a new study by Pew Charitable Trusts.