Malloy Decides To Transition To GAAP Accounting

Incoming Governor Dan Malloy will face political fallout from his decision to transition to GAAP accounting. Economic experts say the change will reveal new fault lines in the state’s budget crisis. WNPR’s Harriet Jones reports.

Dan Malloy has pledged to move the state to generally accepted accounting principles, introducing new transparency into state spending. While on paper right now he faces a $3.8 billion budget deficit, under GAAP that may look closer to $5 billion. Malloy named his budget chief Ben Barnes last week, and he will have to make tough decisions in dealing with state employee unions. Keith Phaneuf of the Connecticut Mirror, speaking on WNPR’s Where We Live says Malloy may face a new kind of tussle with the Democratic legislature.

UConn economist Fred Carstensen says both spending cuts and tax hikes must be approached creatively. Carstensen says it’s important to recognize that Connecticut’s reputation as a high tax state is a myth.

Carstensen says the biggest emphasis has to be on economic revitalization rather than cutting state spending.

For WNPR, I'm Harriet Jones.