Connecticut’s budget director said the state could face a $2.5 billion budget deficit in each of the next two fiscal years.
Melissa McCaw told members of the legislature’s Appropriations Committee that Connecticut ended its 2020 fiscal year in the black with a $55 million surplus and a rainy day fund of more than $3 billion.
But a COVID-19 induced economic downturn could wipe out the surplus and rainy day fund by the end of the 2021 fiscal year.
“If we were to exhaust our rainy day fund our challenges would be even greater in fiscal 2022," McCaw said. "And those are the types of decisions that have to be made as we think about deficit mitigation in terms of how deep will this deficit be and how do we want to position ourselves going into 2022.”
Lawmakers will consider the state’s next two-year budget in the next regular legislative session that begins in January.
In the meantime, Governor Ned Lamont has asked all state agencies to cut spending by 10 percent. And the state might reduce aid to cities and towns.
