The worst news of the week is confirmation state tax collections are running behind. The Malloy Administration had been hanging its hope of a balanced budget on an improvement in the revenue picture. Now the grim budget truth seems upon us.
State Comptroller Kevin Lembo has been flashing warning lights for some time. But the administration wanted to suspend judgment until checking the mailbox for all those personal returns due April 17.
The governor's office now projects a $66.9 million budget gap. Add on the governor's yet-to-be-realized commitment of a $75 million downpayment on closing the $1.7 billion gap created by previous regimes that refused to apply generally accepted accounting principles. That sounds like Governor Malloy needs to find $142 million.
Of course, Lembo's numbers suggest reality may be worse. And then there's the specter, raised by Malloy's budget czar Ben Barnes, of a $90 million overrun in Medicaid spending.
Pretty soon, this starts to sound like real money -- perhaps as much as a quarter of a billion dollars -- in a state coming off a $1 billion tax increase, the largest in its history. And the governor's own numbers suggest another $424 million problem ahead in the 2013-14 budget.
Faced with all this, Malloy wrote another stern letter urging his department heads to be frugal.
Somehow, governor, with just two months left in this fiscal cycle, we're past the point of being able to solve the problem by delaying the new tires for state vehicles. Something big needs to go overboard to keep the ship of state from capsizing. And all signs point to the well-intentioned war on phony accounting as being the first target. It's an attack on a real problem, but one that has no constituency howling under the governor's window. Good government seems about to become the victim of bad planning.
We'd like to be more sympathetic here. The governor has been bold in pursuing some major legislative initiatives – from liquor sales reform to teacher evaluation/tenure – and has been fighting a number of rearguard actions as legislative Democrats failed to fall in line.
But at the core of any governor's job is getting the bottom line right. It can't be an afterthought. It's Job One.
The simple truth is that the governor has spread himself too thin, tilted at too many windmills and missed on the most basic calculation.
For a man who came to office with bold promises to end the smoke and mirrors his predecessors used to the balance the state budget, he seems to be reduced to just those kinds of tricks.
He's already backpedaling on the promise to put the state's accounting on solid footing. Next, he'll need to engage in some cost-shifting sleight of hand. Likely, he'll resort to moving some projects into the next fiscal year. Let's hope he doesn't penalize vendors by slowing payments.
None of that, of course, solves the problem.
One solution is for the state to narrow its focus and stop trying to be nanny to all. But cutting programs and/or spending seems anathema to legislative Democrats.
The other route is to grow revenue. And that means getting serious about making Connecticut friendlier to business. Malloy seems to understand this concept, although the legislature apparently does not, setting up yet another tussle. The programs outlined in reporter Greg Bordonaro's stories in this issue about changes at Connecticut Innovations are a start. But making the state's minimum wage the highest in the country would undo all that good.
It seems time for the warring Democrats to make a choice. All it has taken is a deficit that could easily reach $250 million when all the bills are tallied.