With the fate of the $1.6 billion union concession package in the hands of 1,850 Correction officers, Gov. Dannel P. Malloy instructed his budget director to begin preparing an alternative that’s likely to include large scale layoffs by Sept. 1 and deep programmatic cuts.
“In all honesty, we have been preparing for some period of time alternatives and we’ll finalize those,“ Malloy said Thursday morning at an event at the University of Hartford. “But I really want to give all the union members who really haven’t had a chance to express themselves, an opportunity to express themselves.”
When it became clear Wednesday that the chances of the union ratification were slim, Malloy met with Budget Director Ben Barnes when he returned from a trip to Washington D.C.
“I gave him extensive marching orders,” said Malloy.
Malloy and his administration will have to find $700 million in savings in the first year of the budget and $900 million in the second year. The $700 million in the first year of the budget amounts to about 3 percent of the $20.14 billion budget, which means some of the larger budget items such as social services and municipal aid will become targets.
Dramatic cuts to social services and municipalities are a possibility, but Malloy said he would prefer to limit those cuts as much as possible in the first year of the budget based on the calendar. As a former mayor, Malloy know how difficult it would be for municipalities to have to adjust their budgets when property tax bills have already been sent.
In May, Malloy’s alternative budget proposed laying off more than 4,700 employees to save $455 million in the first year of the budget. Those layoffs were accompanied by $545 million in spending cuts. Instead of presenting an exact roadmap of where those spending cuts would be made, Barnes gave Malloy $1.2 billion in possible cuts to choose from.
At least one of the options included reducing municipal aid by about $468 million. Other options included elimination of funding for the State Child Advocate, Connecticut State Library, Office of Consumer Counsel, Department of Motor Vehicle branch offices, fish hatcheries, school choice programs, health programs for the poor, drivers for the constitutional officers, food stamps, and ferry service, to name a few. Several other line items in the budget were reduced.
Malloy said Thursday that he wasn’t ruling out anything in the second year of the budget.
“Year two is a different issue,” Malloy said. “Because that gives everyone time to accommodate those expenditures. Having said that I can’t tell you that some amount of cuts and reductions won’t be on the table.”
Asked about the number of layoffs, which he previously said would be around 4,700 and upward of 7,500 over two years, Malloy said, “There’s no reason to think the numbers will be lower. If anything, they’ll be greater.“
“We’re probably looking at an average date of people leaving the state payroll around Sept. 1, which means we have almost a quarter of expenses so the numbers will go up, not down.”
He said the 4,700 employees he planned to give notice to in May were just the tip of the iceberg. He said the programmatic cuts to the budget would have meant many more positions were going to be cut.
“I think we’re talking about large scale position reduction pretty quickly,” Malloy added. “Certainly on a larger scale than if we had been able to make these changes effective July 1.”
He said to accommodate for the payout of benefits, as well as unemployment, it’s likely the number of layoffs will increase, but he’s still waiting on final numbers.
Laying off 1,000 employees only equates to $100 million in savings, so laying off 4,000 doesn‘t even get Malloy close to the $700 million he needs to find in the first year.
Did union leadership do a good job of selling this deal to their membership?
“I can only believe they did the best they could,” Malloy said.
If the deal fails it means Connecticut will have to join other states in slashing spending and laying off union employees.
“I don’t have time to be disappointed. We move forward. I’ve been clear one way or another we were going to have a balanced budget,“ Malloy said. “I think there’s an understanding that the world is changing and despite many peoples best efforts we have to go down a different road and I believe that ultimately we’ll have the authority to do that, which is necessary.”
Legislative leaders and Malloy’s budget team will be meeting today to discuss their options.
House Speaker Chris Donovan said Wednesday that he would prefer not to comment until the union votes are complete, but he canceled the announcement of his Congressional campaign Thursday to come to the Capitol and work on the budget.