Archive for November 23rd, 2012

November 23rd, 2012

Connecticut’s Fiscal Cliff

by Christopher O'Brien

Sen. Joe Markley

By Sen. Joe Markley

You may have heard that our state is facing a ‘gloom and doom’ budget scenario: a $365 million hole this fiscal year, and deficits of over a billion dollars in each of the next two years.

The current budget took effect just four months ago, but already revenue is down sharply, and spending is up.  The causes are clear, and not surprising:

  • People are not buying goods, so sales tax collection is less than expect.  Corporation tax revenue and money received from the state’s casinos have also declined.
  • Medicaid costs have increased by over $260 million
  • Personal expenses, salaries, and overtime for state workers is up over by $10 million

A November revenue report by the Office of Policy and Management and the Office of Fiscal Analysis (the state’s number crunchers) has just announced the alarming $365 million shortfall. As recently as November 1, the administration projected a deficit of only $61 million.

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