For a state facing billions in projected deficits, $11,000 may seem like a drop in the bucket, but that is what it will cost Connecticut taxpayers when lawmakers convene for a special session to override Gov. Dannel Malloy’s veto of a bill to save a popular Medicare program.
Gov. Dannel Malloy released a plan Wednesday to close a $208 million state deficit this year by offering a combination of cuts to social service programs and tax increases on cigarettes, hotels, and the state sales tax.
Although Connecticut’s 2017 budget crisis may have come to an end when Gov. Dannel Malloy signed the bipartisan budget on Tuesday, the next budget promises to be just as difficult. The nonpartisan Office of Fiscal Analysis is already projecting a $4.6 billion deficit, largely due to the rapidly rising costs of pensions, retiree healthcare and debt service combined with declining tax revenue. Fixed costs now consume more than 50 percent of General Fund expenditures.
Connecticut’s government spending outpaced the state's gross domestic product by a wide margin since 1990, according to a review of past figures compiled at U.S. Government Spending, an online database of state and federal spending.
The newest budget negotiated between Democratic and Republican leaders in both the House and Senate has yet to be released, but based on the information we have received, this is a breakdown of the changes included in the new budget package.
A financial stress test of all fifty states by Moody’s Analytics showed that Connecticut is unprepared should the country experience another recession - even a moderate one. Connecticut was one of the bottom 15 states that were “substantially unprepared” for an economic downturn, which would lower tax revenue and increase state service needs to help those affected by a recession.