In preparation for his February budget proposal, Gov. Dannel P. Malloy said he’s anxious to hear which defense and discretionary spending cuts Congress will approve within the next two months as part of Washington’s extended deadline to avert the fiscal cliff.
Cuts to programs, particularly those related to defense and Medicaid, could have an adverse effect on the state’s budget, Malloy said in an address to the Greater Danbury Chamber of Commerce Jan. 8 at Cartus Corp.’s headquarters.
Nearly half of the state’s Medicaid program, which accounted for the bulk of the state’s projected budget deficit before Malloy and the state legislature enacted spending cuts in December, is federally funded and much of the state’s economy is dependent on defense spending, Malloy said.
“Here I am in the midst of putting together a budget,” Malloy said. “Not knowing, in any clear way, what the economy is going to look like, as a result of the inability (of Congress) to have appropriately addressed the fiscal cliff.”
Since last fall, when the state Office of Policy and Management projected a $365 million budget deficit for the 2013 fiscal year, Malloy and state legislators have spent the last two months closing the budget gap, primarily through spending reductions and revenue adjustments while avoiding tax increases.
In addition to $170 million in agency spending cuts authorized by Malloy, legislators approved a $221.5 million deficit mitigation bill Dec. 15. With the adjustments, Comptroller Kevin Lembo has projected a budget deficit of $40 million for the 2013 fiscal year, which ends June 30.
Malloy, remarking on the state’s fiscal situation, said he has remained committed to solving the state’s budgetary problems as well as helping Connecticut’s economy and businesses grow.
“What we’re trying to do is put the state on a much stronger fiscal footing,” he said. “We are in a better footing than we were two years ago. That is a reality, even though that’s hard to enjoy in a relatively static national economy, where Washington can’t get out of its own way. But we’re ready. This economy will turn around.”
In the last two years, the state has addressed its unfunded state-employee pension fund, implemented plans for an education reform and created several job creation initiatives, all of which are long-term solutions to improve the state’s economic standing, Malloy said.
The state’s First Five initiative and successive programs have raised roughly $2 billion in private capital investments and the state has expanded its business growth funding initiatives from 200 companies to 500 companies, Malloy said.
“Sooner or later in our state—because we’ve taken on some of the hard decisions and tough choices that we had to make,” Malloy said. “We will enjoy our share of the new bounty.”
State touts Small Business Express
As a part of an Oct. 2011 jobs bill passed by the state Legislature, the Small Business Express program has granted and loaned nearly $67.2 million to Main Street businesses across Connecticut.
Designed to spur job creation, the program provides capital, working capital and other funds to small businesses to offset the void caused by tighter restrictions on lending imposed by some financial institutions.
Since its inception, nearly 500 companies have received either a grant or loan, impacting more than 6,300 jobs, according to a Jan. 3 report by the state Department of Economic and Community Development (DECD). An additional 271 business are scheduled to receive another $38.4 million.
“The (Small Business Express) program gets capital to the small companies that are the backbone of the state’s economy, and their entrepreneurial activity drives additional investment,” Malloy said in a Jan. 3 statement.
Malloy, Lt. Gov. Nancy Wyman and DECD Commissioner Catherine Smith hosted a roundtable Jan. 3 in Hartford aimed at gathering input from businesses that have participated in the Small Business Express program.