In anticipation of falling revenues in the state budget, the Governor used his rescission authority last week, which included $99.2 M in cuts to state agency programs and estimated $3.5M in cuts to the legislative and Judicial branches.
Normally funding that’s directed to programs within CT’s branches of government needs to be proposed by the Governor and approved by the legislature however, the Governor has the authority to cut up to 5% of any line item and 3% of any fund without seeking legislative changes in circumstances where there is a large enough deficit in the current fiscal year. These cuts come in anticipation that capital gains revenue will ultimately be down due to the financial market corrections that have occurred in the past month, and could ultimately be extended further if revenue estimates continue to decline throughout the rest of the fiscal year, which ends on June 30th 2016.
In order to forecast potential revenue drops that may be occurring in the next quarter, the Governor’s budget office (Office of Policy and Management) and the non-partisan legislative budget office (Office of Fiscal Analysis) followed a law titled “Consensus Revenue Estimates” where the two budget offices must agree on a total anticipated deficit that is used when projecting an increase or shortfall of revenue that’s different from what was originally budgeted. This total is used when considering the total surplus or deficit and allows lawmakers and the Governor’s Office to plan on potential financial policy for the coming months ahead.
As of now, the Governor is set to offer his budget for the next fiscal year on the first day of the 2016 session, which, this year, falls on February 3rd. This would need to be approved by the legislature in order to advance.