HARTFORD, Conn. (WTNH) — Governor Malloy is announcing a round of state budget rescissions that amount to over 100 million dollars in spending cuts in his new state budget. It comes just days after the State Comptroller announced the budget was on track to have an 800 million dollar surplus.
So what gives here?
This is a .05 percent cut in the $20 billion state budget, but the Governor’s office says it’s the prudent thing to do. The Stock Market is having another down day Friday. It’s been up and down for the past couple of weeks, but since May it is down 6 percent.
Related Content: Complete list of Connecticut Budget Cuts
Because a large portion of Connecticut Income Tax receipts come from ‘Capital Gains’ it’s reasonable to expect that revenue projections made earlier this year when the state budget was passed will be wrong.
“We know that that (the stock market) has income, that’s an income variation predictor for us. That doesn’t mean that that won’t recover between now and the end of the year but if it was not to recover it means we’d have less money coming in because about $3.7 billion of our revenue is in some way tied to the economic markets or the commercial markets,” said Governor Malloy at a stop in New Haven today.
Social Service Agencies will take the biggest hit, 64 million, that’s mostly Medicaid. 8.5 million from the Department of Mental Health and Addiction Services. 7.5 million from the Department of Developmental Services.