Connecticut is on track to end its fiscal year on June 30, 2017 with a $42 million deficit, according to Comptroller Kevin Lembo – a significant difference from the $5.7 million deficit projected on Oct. 20 by Secretary of the State of Connecticut Office of Policy and Management (OPM) Benjamin Barnes. The latter’s estimate was based in part on the recent $120 million state settlement with Royal Bank of Scotland.
Lembo, who first reviewed the OPM analysis on Oct. 15, said that while he generally agreed with Barnes’ revenue projections, debt service and adjudicated claims resulting from the SEBAC vs. Rowland settlement — which could cost as much as $740,000 this year as part of ongoing recompense for then-Gov. John Rowland’s 2003 layoffs of over 2,000 state workers — could cause the deficit to increase.
“My variance from OPM is entirely due to spending differentials,” Lembo said. “Continued active budget management may eliminate this shortfall, which represents 0.2 percent of net budgeted expenditures.”
In addition, while OPM estimated that General Fund expenditures would exceed the budget by $9.3 million, Lembo said he expected the number to be closer to $46 million over budget. The comptroller added that his analysis also depended upon the state treasurer’s larger estimated debt service shortfall of $19.4 million.
Nevertheless, “General Fund revenue estimates for Fiscal Year 2017 are consistent with a continuation of moderate economic growth,” Lembo said.