State budget deficit has grown even worse

HARTFORD, Conn. (WTNH) -- The Governor got a warm welcome at the Connecticut Retail Merchants Association luncheon Wednesday. He's hoping their cash registers ring a lot this holiday season so that more sales tax revenue comes into state coffers.

But just up the street at the Capitol, his budget director was giving the bad news to lawmakers, that the state budget red ink has grown even worse than the 300 million announced a few days ago.

"All told, these changes result in a projected deficit of about 365 million dollars," Ben Barnes, the State Budget Director, said.

On Monday, the Governor said that Connecticut profit takers on Wall Street seeking to avoid higher federal taxes next year would help to erase the latest deficit.

Under questioning today, the budget director appeared to be backing away from that prediction.

"Is that your feeling as well, we shouldn't worry about this projected deficit because we seem to see a one shot revenue spike pretty soon?" Republican Rob Kane of the Appropriations Committee asked.

"I am hopeful that some of that deficit will be mitigated through improvement in revenues. I am also certain that some of this deficit will be mitigated through spending constraints," Barnes said.

The State Comptroller paints a very grim picture.

"We're not done sliding, and that's the problem, so it's not like we've leveled off at this point," Democrat Kevin Lembo, the State Comptroller, said.

Republicans on the committee who have been accusing Malloy of trying to tax his way out of the recession are now saying 'I told you so.'

"I think we're looking at significant deficits going into the new year. I think we're look at very serious problems with our bond rating," Republican Crain Minor of the Appropriations Committee said.

Because the deficit is now so large, the Governor is forced by law to announce a budget mitigation plan.

"We'll come forward with a plan that balances the budget. The budget will be balanced," Gov. Malloy said.