Comptroller: FY 21 Deficit Exceeds $2 Billion; Governor Extends Public Health Emergency

State Budget Deficit Estimate Exceeds $2 Billion, Triggering Deficit Mitigation Plan

In his first monthly economic update detailing fiscal year 2021, state Comptroller Kevin Lembo today projected a deficit of $2.1 billion for FY 21 and pegged the state’s Budget Reserve Fund (BRF) at $3.035 billion.  The state fiscal year runs from July 1 to June 30.

The BRF balance now totals 15.1 percent of the budget’s net General Fund appropriations — a record high.  Recent changes to state law raised the reserve cap.  Now, when the BRF exceeds the 15% statutory cap, those revenues go toward paying down debt and pension liability.

The Governor’s Office of Policy and Management (OPM) noted in its August budget letter that if the Comptroller certified a budget deficit of greater than 1% ($220 million) of the General Fund that the agency would be required under state law to submit a deficit mitigation plan to the Legislature by October 1st.  There are no criteria for determining what must be included in the deficit mitigation plan and the Legislature has no obligation to act upon it. 

In the budget letter, OPM also noted that there are sufficient funds in the Budget Reserve Fund (BRF) to cover the $2 billion FY21 projected shortfall, which could be an indication of where it will turn to mitigate the deficit.

Historically, a deficit mitigation plan would include a set of recommendations calling for expenditure cuts, tax increases and delayed payments. In addition, the Governor has the authority to reduce certain budgeted accounts by up to 5%, which he has not exercised to date.

Governor Officially Extends Existing Public Health Emergency and Civil Preparedness Orders to February 9th

Governor Ned Lamont today officially signed orders extending to February 9, 2021, Connecticut’s states of civil preparedness and public health emergency in response to the COVID-19 pandemic. Originally declared in March and scheduled to expire on September 9, the governor said that the states of emergency must remain in place in order for the state to effectively respond to the unprecedented and ongoing global pandemic.

“We’ve come a long way from where we were when COVID-19 first hit Connecticut back in March, and working with our public health officials, other stakeholders, and residents, we’ve built an infrastructure that has taken our state to one of the lowest rates of transmission in the country,” Governor Lamont said. “But Connecticut is not out of the woods yet, and the executive orders we’ve put in place remain critical in our daily fight to contain COVID-19. Bringing an abrupt end to this state of emergency at this time would cripple our ability to quickly respond to new challenges and risk the hard work and sacrifices everyone has made to protect our state from this disease. Over the next several months, our administration will continue working with our partners in the legislature, in our municipalities, in our nonprofits, in our long-term care facilities, and in our hospitals to collaboratively combat this virus.”

Governor Lamont’s orders extending Connecticut’s COVID-19 states of civil preparedness and public health emergency

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