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State statute requires that when the comptroller certifies a shortfall in the General Fund in excess of 1%, the governor musts present lawmakers with a deficit mitigation plan within one month "to modify such allotments to the extent necessary to prevent a deficit."
Justin Theal, an officer with The Pew Charitable Trusts’ State Fiscal Health team, calls Connecticut “one of the most financially secure states going into the recession.”
A continued decline in COVID-19-related hospitalizations is giving hope that the state is on the downside of the coronavirus curve, Gov. Ned Lamont said today, even as positive cases rose by over 800 and another 125 deaths were recorded.
Meanwhile, the state’s budget deficit is projected to grow from about $28 million to roughly $60 million, due in part to its recent settlement with state hospitals.
The comptroller insisted the state "must maintain financial discipline."
“We still need to take steps to close the deficit this year and to avoid one in the (fiscal) year that starts in July,” Gov. Dannel P. Malloy said.
If the surplus is ultimately confirmed, Connecticut would avoid tapping into its budget reserve for the first time in three years.
In a letter to the governor, Kevin Lembo said that his deficit projection is slightly higher than the deficit reported by the Office of Policy and Management.
New revenue erosion and higher pension costs could increase projected budget deficits to $1.5 billion next fiscal year and $1.74 billion in 2018-19.
The figure is significantly higher than the $5.7 million deficit recently projected by Policy and Management Secretary Benjamin Barnes.
Kevin Lembo said that erratic reports on job and wage growth – both locally and nationally – have complicated the forecasting process.
Comptroller Kevin Lembo said the budget reserve fund should be enough to offset the general fund shortfall.
Addressing the state’s progress over the last two years when it comes to job creation, energy, education and the state’s budget deficit, Gov. Dannel P. Malloy said the state is off to a strong start – but it’s only the start.
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