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State's fiscal challenge grows

Published January 17. 2013 4:00AM

When addressing the Chamber of Commerce of Eastern Connecticut in Norwich Wednesday, Gov. Dannel P. Malloy again offered assurances he will not seek more tax increases to balance the state budget. Yet new figures coming out of Hartford show just how difficult that will be.

While it is certainly important for the legislature to consider gun, mental health and security policy changes to reduce the chances of future mass murders such as the state saw in Newtown Dec. 14, lawmakers cannot afford to lose focus on dealing with state finances and the economy.

A consensus report from the administration and the nonpartisan Office of Fiscal Analysis documents that revenues from taxes and other fees continue to fall short of expectations. That means long-range projections for the coming fiscal year, which begins July 1, have to be lowered as well. The bottom line is that the projected fiscal shortfall for the next fiscal year grew by another $200 million and is now likely over $1 billion, a gap of about 5 percent to 6 percent of the total budget.

We agree that the governor, who with the legislature used a combination of $1.5 billion in new taxes and fees, labor concessions, and program cuts to fill the $3.5 billion fiscal hole he inherited when elected in 2010, should not propose or support more tax increases. He may have to push for more union concessions, which we understand would be difficult and require reopening contracts again, something the unions are certainly loathe to do. Cuts in municipal aid are appearing inevitable, but if so they should come with repeal of costly state mandates and help in regionalizing services to improve efficiency.

Cuts that are too steep, or poorly chosen, could further slow the state's struggling economy.

In three weeks the governor will unveil his budget plan. While the challenge is not as great as he first faced when elected, it is significant.

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