A new report by the General Assembly”™s nonpartisan Office of Fiscal Analysis estimates that Connecticut is looking at an approximately $4.3 billion budget deficit over the next two years and a further $2.1 billion shortfall the following year.
In its annual Fiscal Accountability Report, the OFA predicts that given the current situation Connecticut stands to lose about $2.1 billion the fiscal year that begins July 1, 2021; $2.2 billion in FY 2022-23; and another $2.1 billion in FY 2023-24.
While the current balance in the state”™s budget reserve fund is $3,012.9 million ”“ its highest ever ”“ that fund is projected to be “almost entirely depleted by the end of FY 22, absent mitigating action,” according to the report.
The economic impact of Covid-19 on the state has been the primary culprit, the report stated.
In addition, the special transportation fund could become insolvent by 2024, according to the OFA. The fund’s operating deficit is estimated to be $46.1 million this fiscal year and $65.9 million by FY 24.
One way to get more money into the transportation fund would be the reintroduction of highway tolls, but after Gov. Ned Lamont”™s efforts to do so last year failed, he has said he will not bring the subject up again during the next General Assembly session, which starts Jan. 6.
In a joint statement, Senate Republican Leader-elect Kevin Kelly (R-Stratford) and Senate Republican Leader-elect Pro Tempore Paul Formica (R-East Lyme) said it was “alarming that so far this year Democrats have called for more borrowing, abandoning the ‘debt diet’ and not doing anything on the state budget until April.
Echoing comments Kelly made to the Business Journal last week, the statement continued: “We are again calling on Gov. Lamont to bring all legislative leaders together to get to work now, because every day of delay only moves us closer to a self-fulfilling prophecy of draining the rainy day fund and increasing taxes. We need to explore other tools and policies now to avoid that situation.”
