Thursday June 30th was the last day of Connecticut’s fiscal year.
But even with the start of a new year, our state’s financial problems are not going anywhere.
This will have serious consequences for our families and jobs throughout Connecticut.
It’s why I stand with fellow Republicans calling for long-term structural changes to the state budget to improve our economy.
The following editorial explains CT’s budget problems. Please read and share. Join us in spreading the word so that we can bring fiscal sanity back to CT.
Connecticut spending – No more excuses[Waterbury Republican-American Editorial: June 30]
Connecticut’s finances are a mess.
Declining revenues will leave the state with a deficit between $315.8 million and $322.9 million when fiscal year 2015-16 closes today, according to projections from Democratic Gov. Dannel P. Malloy and the Democratic-controlled legislature. “And since prior year’s tax receipts are a crucial factor used to project likely revenues in the following year,” the Connecticut Mirror reported June 28, “the new forecast probably lowers analysts’ expectations for the 2016-17 fiscal year.”
Gov. Malloy and majority lawmakers blame the economy for the revenue erosion.
There is some truth to this, but it should be noted the Capitol Democrats pushed policies that have had devastating economic consequences.
For FY 2015-16, the Malloy administration revised income-tax receipts and sales-tax receipts downward by $75 million and $28 million, respectively. The income-tax figure includes payments made via paycheck deductions, as well as quarterly payments on income generated by dividends, capital gains and other sources at the mercy of the stock market.
Evaluating Connecticut’s finances June 27, Moody’s Investors Service noted the per-pay-period payments have come in short because of Connecticut’s lackluster job growth. (Trouble on Wall Street held down payments on investment-related income, which, as we noted yesterday, illustrates the problem with staking so much on targeting Connecticut’s wealthiest residents for tax increases.)
Weak sales-tax revenue flow also is a sign of a weak economy, Senate Minority Leader Leonard A. Fasano, R-North Haven, noted June 27.
Connecticut’s economic struggles are nothing new. The state has lagged most of the United States in recovering jobs lost during the Great Recession, as Moody’s acknowledged. For years, it has been plagued by anemic growth. In 2015, the economy grew by 0.6 percent, according to U.S. Department of Commerce data.
These results were predictable. Since 2011, Gov. Malloy and Democratic lawmakers have teamed to pass business-unfriendly policies, which are not conducive to economic prosperity. Their agenda has been marked by regulations, taxes, sloppy budgeting and coddling of public-employee unions.
The Malloy administration almost certainly will fill the 2015-16 budget hole by transferring funds from the $406 million budget reserve, leaving a balance of about $90 million. This is “an amount equal to roughly one-half of 1 percent of annual operating costs. (State Comptroller Kevin P.) Lembo recommends a reserve of 15 percent,” the Mirror reported. Moody’s declared this a credit negative.
The 2016-17 budget, approved in May, already has earned Connecticut credit-rating downgrades from Fitch Ratings Inc. and Standard & Poor’s. It may produce more downgrades if it falls apart.
These messes are on Gov. Malloy and his Democratic allies.
They can’t make excuses: For the past five-and-a-half years, they alone have set Connecticut’s course.
-The above editorial is from the June 30th Waterbury Republican-American