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Governor M. Jodi Rell today met with her top economic advisors for a briefing on the state and national economy and warned that, while Connecticut may be better positioned than many neighboring states, another round of budget cuts will be needed to head off a projected $146 million deficit. “We can weather this storm, but we need to continue to practice fiscal prudence,” Governor Rell said. “Connecticut can stay ahead of the national economic curve, but only if we make the right decisions. The right decisions do not include an increase in taxes or spending money we just do not have. Our families cannot afford new taxes. We must force government to live within its means – just has families across Connecticut must do each and every day. “My Council of Economic Advisors confirmed today that Connecticut’s economy still faces a few bumps in the road,” the Governor said. “Consumer confidence is at a very low ebb in our state and consumer spending accounts for about two-thirds of our economy. It is more important than ever that state government does not add to the existing burdens on Connecticut businesses and families.” The Governor said a hiring freeze and out-of-state travel ban will remain in effect. She already has used her executive powers and ordered about $140 million in budget cuts at state agencies. Governor Rell will also advise her commissioners of additional cuts and she has warned legislative leaders against increasing taxes or dipping into the Rainy Day account. Cost-cutting measures the Governor imposed this spring and better-than-expected income tax revenue helped the state finish with a modest surplus of approximately $84 million for the fiscal year that ended June 30. Revenue predictions for this fiscal year are down on several fronts. The Governor’s Budget Office expects personal income tax collections to be $56.4 million below projections. Sales tax revenue is expected to be down $81.5 million. Corporation tax and real estate tax collections are likely to be down $78.9 million and $63.2 million, respectively, while revenue from the tribal casinos is projected to be $37.6 million less than originally anticipated. On the national front, economists have projected the subprime mortgage problem could last for another 18 months. Nine percent of Americans are either behind on their mortgage or in default. The price of oil, while down nearly $40 from a record $145 a barrel, remains significantly higher than the $70 a barrel from last year and, experts caution that those increases have not fully worked their way into the economy. “This is an economy that is growing inch by inch, instead of yard by yard,” said Donald Klepper-Smith, the Chief Economist and Director of Research at DataCore Partners LLC, who is member of the Governor’s advisory panel. “We are looking at a disconcerting mix of inflation and deflation. Inflation with respect to food and energy prices. Deflation with respect to generators of consumer wealth – stocks and housing.” Other advisors meeting with the Governor today were: - Ed Deak, Ph.D., Professor of Economics, Fairfield University - John Tirinzonie, State Labor Economist, Connecticut Department of Labor - Todd Martin, Economic Advisor to People’s United Bank and President of Todd P. Martin Economic Services - Susan Coleman, Ph.D., Ansley Professor of Finance, University of Hartford - Dr. Nick Perna, Managing director of Perna Associates Also, Stan McMillan, UConn Dept. of Economics - Joan McDonald, Commissioner of Economic and Community Development © Copyright by NorwalkPlus.com. Some articles and pictures posted on our website, as indicated by their bylines, were submitted as press releases and do not necessarily reflect the position and opinion of NorwalkPlus.com, Norwalk Plus magazine, Canaiden LLC or any of its associated entities. Articles may have been edited for brevity and grammar. Related Articles: Green Party candidates excluded from debates - Sep 23, 2008 - 6:25 PM South Norwalk Railroad station renovation project underway - Sep 23, 2008 - 1:17 PM Governor Rell: Projected budget deficit climbs to more than $300 million - Sep 22, 2008 - 6:11 PM Governor Rell writes congressional leadership urging action on second federal stimulus package - Sep 18, 2008 - 1:58 PM Governor Rell: Added LIHEAP funds ‘more than welcome’ – but still more required - Sep 17, 2008 - 1:27 PM CURRENT HEADLINES: Top of Page
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