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STATE OF CONNECTICUT EXECUTIVE CHAMBERS HARTFORD, CONNECTICUT 06106 |
M. Jodi Rell Governor |
FOR IMMEDIATE RELEASE August 20, 2010
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Contact: 860-524-7313
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Governor Rell: Shortfall in Federal Funds
Means $63.4 Million Deficit Projection
Governor M. Jodi Rell today announced that due to a shortfall in federal funding and higher than expected demand for state social services, her budget office is projecting a deficit for the current fiscal year of $63.4 million. The deficit comes despite an improvement in projected state income tax and sales tax collections.
Connecticut’s share of newly enacted federal Medicaid and education funding is $193.4 million less than state budget anticipated, Governor Rell said. Offsetting the lower than expected federal funding is a net increase in projected state revenues of $390.5 million. That increase includes higher projections for income tax collections – up by $127.5 million – and sales tax collections, up by $153.8 million.
In both cases, the improvements are due to better than expected collections in the fiscal year that ended June 30 and due to slowly improving economic conditions.
Even so, the expenditure side of the budget remains challenging, the Governor said. Expenses are currently projected to exceed the budget by $171.7 million, in part because of continued high demand for social services and in part because planned savings – such as $50 million in cost-cutting that is supposed to be achieved by the Legislature’s Enhancing Agency Outcomes panel – have not materialized.
“I will be working with my budget officials to erase the shortfall through administrative actions,” Governor Rell said. “The fiscal year has barely begun and we have an opportunity – one we cannot afford to miss – to control this deficit before it grows unmanageable. I will be announcing the details of my budget-cutting plans soon.
“I am encouraged by the improvements in the state revenue picture – but it would be a mistake to look at these projections and believe that our problems will resolve themselves,” the Governor said. “The savings assumptions built into the budget must either be achieved as planned or obtained through other means.”
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