HARTFORD — Comptroller Kevin Lembo on Friday projected the state is on pace for a $207.8 million deficit, a hole that requires legislative action.
Lembo reported the budget shortfall in his monthly letter to Gov. Dannel P. Malloy, whose budget chief projected a deficit of $202 million in his own monthly letter on Nov. 20.
The projections exceed the 1-percent threshold that triggers a deficit mitigation plan, meaning Malloy will have to submit a plan to the legislature for approval. These are the first projections since the legislature adopted its budget on Oct. 28.
Lembo also raised concerns that the deficit could grow, saying Republican-led efforts at federal tax reform could adversely affect the state.
“Congress is considering significant modifications to federal tax law that could have profound implications for Connecticut, depending on what specific provisions, if any, are enacted,” he said.
Senate Republican Leader Len Fasano. R-North Haven, disagreed with the size of Lembo’s projected deficit, but said he is not surprised there is a shortfall so soon. He blamed Malloy, saying in his statement that “even the passage of a historic bipartisan budget with significant structural changes is not yet enough to immediately right the ship.”
“As Gov. Malloy now begins to build his own deficit mitigation plan, I caution him to remember how his past policies have failed our state,” Fasano also said. “I also hope that he remembers the importance of protecting the core functions of government, and that he avoids making decisions out of spite if he wants to gain support for his proposals in the legislature.”
Senate President Pro Tempore Martin M. Looney, D-New Haven, had a much shorter reaction, merely saying in a statement that “legislative leaders will meet with Governor Malloy to discuss potential next steps” on Wednesday.
Last month, the Office of Policy and Management and Office of Fiscal Analysis jointly revised income projections downward by $178 million for the current fiscal year. The two agencies also reduced revenue expectations for next year by $147 million.
Aside from the revenue erosion, Lembo also identified spending overruns that would add to the deficit. Most notably, he said the state has spent $12.5 million from its adjudicated claims account to cover costs of the settlement to the state employee unions’ lawsuit against former Gov. John G. Rowland.
The 2015 settlement, which settled a 12-year-old complaint that Rowland illegally laid off more than 2,500 state employees, is projected to cost between $100 million and $125 million.
Lembo said expenses stemming from the settlement are averaging $2.5 million per month thus far, and projects that would result in a $20 million spending overrun for adjudicated claims.