September 4, 2012

Medicaid spending pushes CT 2012 budget into red

Comptroller Kevin Lembo said Tuesday that the state ended fiscal 2012 with a $143.6 million deficit, which was driven in part by a 7.6 percent increase in Medicaid spending.

The deficit has been eliminated using budget reserves from prior years, Lembo said.

In a letter to Gov. Dannel P. Malloy, Lembo reported that General Fund revenue for fiscal 2012 grew 4.8 percent or $854.2 million. That growth fell $227 million short of the original budget target.

Meanwhile, Lembo said spending in fiscal 2012 was up $936.9 million or 5.2 percent over the prior year.

The largest component of the increase was from the Department of Social Services (DSS), whose Medicaid caseload grew by 52 percent. That led to a 7.6 percent, or $409.4 million, increase in spending on the health insurance program for the poor.

Additional spending increases resulted from contributions to teachers' retirement, up $210.2 million; debt service payments; and funding for the state employees' retirement.

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