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Governor M. Jodi Rell today announced that the estimate from her budget office of the current state budget deficit has more than doubled from last month, increasing from about $145 million to more than $300 million. “As Wall Street goes down our budget deficit is going up,” Governor Rell. “Our state economy has been doing better than the national economy – but we are simply not immune from the effects of the national economic downturn. We are still in far better shape than our neighboring states but we are lowering estimates for personal income taxes, casino revenues and other taxes. “Moreover, this new estimate does not fully reflect the incredible ups and downs of the markets in just the last few days,” the Governor said. “Like families all over Connecticut, state government must face the grim fiscal reality and plan accordingly. I will continue to reduce spending even beyond the budget cuts and cost-cutting measures I have already ordered. We already looking for places to make additional budget cuts. “Connecticut families do not have the luxury of simply turning to their employers and demanding a raise,” Governor Rell said. “Nor can state government simply turn to its ‘employers’ – the taxpayers – and demand a raise in the form of tax increases. And given that things are likely to get worse before they get better, we need to keep the Rainy Day Fund available for the future. I am determined to make sure state government lives within its means.” The Office of Policy and Management (OPM) estimate comes amid extraordinary turmoil in the stock market and global energy prices. The Dow closed Monday at 11,015.69, down 372.75 points. Oil prices saw their greatest one-day increase ever, up $15.45 a barrel to $120.92. Crude oil had traded at the even higher price of $130 a barrel during the source of the day. “These are uncertain, unsettling times – Congress must act quickly to strengthen its oversight of the financial services industry and stop some of the bleeding on Wall Street,” Governor Rell said. “Many of the factors affecting Connecticut’s economy are the result of forces beyond state control – they must be addressed by comprehensive federal policies.” The OPM estimate reflects a $75 million decrease in expected personal income tax revenue and a $27.4 million decrease in oil company tax revenue. Projected casino revenues have been reduced by $20 million. Sales taxes and insurance company taxes are each running $10 million below expectations, while projected cigarette tax revenue has been reduced by more than $5 million. Since the spring, Governor Rell has taken a number of critical steps to reduce state spending. She instructed commissioners and other agency chiefs to review their expenditures and stop all non-essential spending, and directed them to begin a ban on out-of-state travel by all personnel unless the trip is paid for out of non-state funds. The Governor also ordered budget rescissions of 3 percent to 5 percent at many state agencies. The rescissions will reduce General Fund expenditures by a net total of about $104.2 million. Further cuts of up to 5 percent at each state agency, are under consideration. © 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 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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