December 1, 2017

Lembo: Latest projected budget shortfall requires deficit mitigation plan

PHOTO | Contributed
PHOTO | Contributed
Comptroller Kevin Lembo

Comptroller Kevin Lembo on Friday projected that the state is headed for a $207.8-million deficit for fiscal year 2018, which triggers the requirement for a deficit mitigation plan.

According to the law, Gov. Dannel P. Malloy is required to submit the mitigation plan to the legislature because the deficit exceeds 1 percent of the state's total net General Fund appropriations.

The latest figure includes Lembo's expectation of a $20-million deficit in an account the state uses to pay claims and attorney fees from a legal settlement related to former John Rowland's illegal firing of state employees (SEBAC v. Rowland).

The State Employees Bargaining Agent Coalition (SEBAC) claimed in a 12-year lawsuit that former Gov. John Rowland and his budget chief, Marc Ryan, illegally targeted union members for layoffs but spared non-union employees.

Lembo also pointed to great uncertainty related to the future of federal tax reform.

"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," Lembo said. Future revenue forecasts will need to evaluate the consequences of any tax changes on the federal level."

In an email, Senate President Pro Tempore Martin M. Looney (D-New Haven) said legislative leaders will meet with Malloy Wednesday to discuss "potential next steps."

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