“Until the state stops losing jobs and the payroll taxes that go with them, this deficit will continue to present difficult challenges for policymakers.”
And if we may add, there”™s the loss of spending on goods by the workers and the resulting decrease in sales tax collections.
State Comptroller Nancy Wyman made the statement when she projected the state would end the 2010 fiscal year with a budget deficit of $513.3 million, which she characterized as a modest improvement from a month earlier.
The improvement in the deficit ”“ $36.2 million ”“ was due to a net increase in revenues of $9.4 million and net spending reductions of $26.8 million, she said. And those revenues were due to the sale of properties that had reverted back to the state from estates that had no known heirs.
Even in death, those former taxpayers helped the state raise millions of dollars from the sale of the properties.
With more than 88,000 jobs wiped out in the state since March 2008, the generally accepted start of the recession, Wyman expects income tax collections to end the year about $212 million below original estimates. The payroll tax accounts for about 65 percent of the state”™s total income tax receipts.
And oh yes, the job losses have essentially wiped out any monetary gains made from the tax increase on millionaires.
Members of the General Assembly continue to harangue the governor about not reining in spending.
“Unfortunately, Rell has not done her job,” wrote state Sen. Martin M. Looney in an opinion piece in the New Haven Register. “More than half of the budget deficit is due to additional spending in the Rell administration.”
Well, he”™s right.
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Gov. M. Jodi Rell just added people back on the payroll at the Department of Labor.
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She approved the temporary return of 30 call-center workers who recently retired and overtime for 65 other call-center specialists.
The audacity!
Well, not exactly. You see as more and more residents have lost their jobs, they have put a great burden on the Department of Labor, which just happens to be the agency that handles claims for unemployment insurance.
“We are on uncharted ground ”“ the demand for (unemployment insurance) is up 40 percent from a year ago and the Labor Department is issuing between 150,000 to 160,000 checks each week totaling approximately $55 million,” Rell said.
Computer and telephone glitches are choosing now to rear their heads as if in defiance to the jobless who are just trying to keep their heads above water.
“Every penny represents a lifeline to a family in need,” she said.
Her entreaty to the Labor Department is simple:
“Do whatever it takes to make sure this system can handle the load; help people in need and keep the unemployment insurance process moving.”
Looney and other Democratic lawmakers need to stop casting stones and make clear-cut plans to reduce the deficit and create jobs.
Stop the fighting.
Make it work; better yet, make work.
