The Capitol Beat: October 28, 2016

OFA, Comptroller Hear Earful about Budget Dysfunction, ‘Dissonance’

On Wednesday, the Legislature’s nonpartisan Office of Fiscal Analysis (OFA) fielded a battery of questions from a half dozen GOP lawmakers who wanted to know why there were discrepancies in the 2017 budget deficit numbers recently provided by the Governor’s budget office and OFA.

Fast forward one day, and an attendee at a Rotary luncheon featuring State Comptroller Kevin Lembo asked the Comptroller: “Why are there discrepancies between OFA and OPM’s budget deficit numbers?” He added: “It just creates confusion and dissonance among the public. It seems to me there needs to be reconciliation before any announcements are made if you want to create trust.”

OFA projected a deficit of $77.9 million for 2017 a couple of weeks ago; OPM’s October projections pegged it at about $5 million. On November 1, the Comptroller will issue his monthly update on the 2017 budget picture, followed by updated consensus revenue projections from OFA and OPM on November 15. Interestingly, but not surprisingly, none of the bean counters are talking about a potential decrease in the projected 2017 deficit.

There are no cut–and-dried answers to questions regarding budget and revenue variations, except to say, as both OFA and Comptroller Lembo did each in their own cautious way, it’s equal parts politics, timing, and filing deadlines combined with legal, constitutional and structural considerations.

Lembo told the Rotarians that the Office of Policy and Management (OPM) – the Governor’s budget office – tends to be more “enthusiastic” when it comes to its budget predictions, while OFA tends to be more “dire.” Acknowledging that this looks dysfunctional from the public’s perspective, Lembo remarked that it is good insofar as it “forces the conversation.”

Central to that conversation is how the state is going to tackle its outsized pension liabilities over the long haul. On a positive note, Lembo said that management and labor are negotiating right now over a way to pay for the state employees’ pension plan. Under discussion is a proposal that would see payments increase in the short-term and then flatten out over the long-term. Beyond this, the Comptroller said Connecticut needs to think long term about “growth, growth, growth.”

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