By: Keith M. Phaneuf, Jacqueline Rabe Thomas and Arielle Levin Becker
On January 23, Gov. Dannel P. Malloy unveiled more than $31.5 million in spending cuts in his second round of emergency budget reductions, with social services, public colleges and universities and the state court system again taking the heaviest hits.
The administration’s chief budget agency, the Office of Policy and Management, technically ordered $24.6 million in cuts to 29 agencies and higher education units.
The governor, who has limited authority to unilaterally order cuts, also requested $7 million in further reductions from the judicial and legislative branches, as well as from the state’s watchdog agencies – all of which are exempt from the budgetary rescission statute.
“We know these rescissions affect programs that help the people of Connecticut, but we need to control spending to avoid a deficit at year-end,” Malloy’s budget director, OPM Secretary Benjamin Barnes, wrote in a statement.
“Unfortunately, [the] Governor’s ability to make mid-year budget cuts is limited by amount and line item. We will continue to scrutinize state spending, and if necessary, the Governor will take additional steps, or propose additional steps to the legislature, to keep this year’s budget in balance. Those decisions will be made as we develop next year’s budget, which will also require some very tough choices.”
Significant red ink remains
The Malloy administration reported a nearly $121 million deficit earlier this week. And although that represents less than 1 percent of this year’s general fund – which covers the bulk of the state’s operating costs – much of the overall spending is fixed by contracts or other obligations and cannot be reduced quickly.
State law requires the governor to submit a more detailed, deficit-mitigation plan to the legislature whenever the comptroller certifies a deficit in excess of 1 percent. In this year’s budget, that would involve a shortfall topping $175 million.
Leaders of the Republican minority in the House and Senate have charged the Democratic governor with acknowledging the red ink in this year’s budget in piecemeal fashion in hopes of avoiding being mandated to craft a formal deficit reduction plan.
Malloy, who won re-election to a second term in November, spent much of last fall insisting state finances were stable.
“Cutting spending is the way to fix our state’s financial crisis,” said Sen. Robert Kane of Watertown, the ranking GOP senator on the Appropriations Committee. “We simply can’t afford more and more tax hikes in this state. We face multi-billion dollar problems in the years ahead. We need to stay focused on what taxpayers’ dollars are spent on, and go line by line in the budget to make cuts.”
It wasn’t immediately clear how much of the overall budget deficit would be eliminated by the latest cuts.
That’s because every state budget is balanced, in part, on “lapses” – assumed savings targets that agencies are expected to achieve throughout the fiscal year. And rescission orders sometimes cancel spending that agencies already had planned to suspend to achieve savings targets. In those instances, the governor rescinds spending that already effectively has been cut, saving the state nothing.
But even if all of the cuts announced are applied to the deficit, a shortfall of about $90 million still remains to be solved.
Social services and health care cut the deepest
Almost $11 million was taken from various social service agencies.
The largest cut was aimed at the Department of Developmental Services, which lost $8.4 million.
And more than half those funds came from employment and other support programs for people with disabilities, or from voluntary services.
A smaller cut of almost $60,000 targets a Department of Public Health program that pays for medical care of patients with tuberculosis. The department included it in a list of potential budget cuts submitted to Malloy’s budget office, but noted that reducing funding for the program “could result in less patients being treated and TB being spread to others in the community.”
Universities and courts face more cuts
Connecticut’s public colleges and universities – a frequent target of governors’ emergency cuts in the past because of the large operating grants they receive in the state budget – sustained a $6.2 million cut on January 23. And that’s after losing $6.5 million during the first round of emergency cuts Malloy ordered in mid-November.
It was not immediately clear how the public colleges and universities would adjust their budgets to compensate for the reduced state aid.
Both rounds of reductions affect the University of Connecticut and the UConn Health Center in Farmington, as well as the state universities and community colleges. All of the state’s higher education units sustained major cuts in state assistance in 2011, as Malloy and legislators grappled with a record-setting, $3.7 billion budget deficit. State aid only recently returned to pre-2011 levels.
Earlier this week, a UConn spokeswoman confirmed that 15 employees had received layoff notices, but insisted it was part of a reorganization and not an effort to shave costs.
“Having just received the figures, UConn will now be examining its options and working to determine the most appropriate ways to address the rescissions,” UConn spokeswoman Stephanie Reitz said.
The Board of Regents for Higher Education, which oversees the 12 community colleges and four state universities, was hit with a $2.5 million cut.
The system’s budget director, Erika Steiner, said recently such cuts often mean vacant positions must remain unfilled. “As things get crunched, we find ourselves holding open positions,” Steiner said.
“That’s almost always the way we save money. We don’t fill open positions. We work the heck out of all the people that are here.”
The judicial branch, which agreed in mid-November – at Malloy’s request – to forfeit $6 million of its funding, was asked by the Governor during the announcement for another $6 million.