HARTFORD – Connecticut may borrow almost $1 billion to deal with a deficit in the state budget for the fiscal year that ended June 30 amid an ongoing battle between state leaders over taxes and spending, Bloomberg News reported today.
Conn. State Comptroller Nancy Wyman said yesterday the budget deficit for the 2009 fiscal year, which ended June 30, has grown to $942 million, with a final figure to be issued Sept. 1.
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The deficit ballooned after Gov. Jodi Rell and lawmakers failed to agree on spending cuts and tax increases to make up for a $1.5 billion drop in annual tax revenue in the last fiscal year.
Rell, a Republican, and Democratic legislative leaders have supported borrowing to balance last year’s books rather than dipping into the state’s $1.4 billion rainy-day fund, which they plan to tap to balance the fiscal 2010 and 2011 budgets.
Bloomberg estimates the state would pay about $25.6 million a year in interest if it sold $942 million in seven-year bonds at yesterday’s average rate of 2.72 percent.
Connecticut, the richest U.S. state by income per capita, faces a budget deficit estimated at $8.55 billion over the next two years, according to Bloomberg.
Rell and the Democrats remain locked in a standoff, making Connecticut one of only four U.S. states that still has not passed a balanced budget, as required by law in every state except Vermont. (The other three are Arizona, North Carolina and Pennsylvania.) Budget negotiations were scheduled to resume today.
Additional information is available at CT.gov.
