State Comptroller Kevin Lembo has released figures showing the state’s Rainy Day Fund is going to be $113.1 million smaller because of the 2014-15 fiscal year deficit. In his annual report, he made a push for building up the state’s reserves.
As it stands now, the Rainy Day Fund is down to $406 million. Lembo said in his report, “Budget reserve funds are vital in creating budget stability. Proper reserves eliminate the need for large tax increases and program cuts in tough economic times when such policies place additional drags on economic growth.”
According to the report, Connecticut’s budget reserves are inadequately funded. Lembo said in his report, “A 15 percentreserve is an accepted standard target, which for FY 16 would equate to $2.7 billion.”
The report states since 1990 the budget has been bolstered by over $5 billion in unanticipated revenue. Yet, most of that money was not placed into reserves. Lembo pushed legislation through the General Assembly in 2015 that requires windfalls be used for budget reserves.
The hit on the rainy day fund could have been worse, Lembo reported. Three deficit mitigation plans totaling about $100 million were required to control the growth in projected monthly shortfalls during the fiscal year, according to the comptroller’s office.
