Even though Gov. Dannel P. Malloy’s administration is leaving 2,300 executive branch jobs vacant, the state is still running deficiencies estimated at $33 to $65.2 million depending on which branch of government you believe.
Office of Policy and Management Ben Barnes told the legislature’s Appropriations Committee Monday that his office is currently projecting a $33 million deficiency, most of which is a result of the increased Medicaid population. However, no matter what the numbers say currently he’s determined to balance the budget before the end of the year.
“It’s certainly my intention to end the year with a balanced budget,” Barnes told the committee.
Currently the state is spending $2.7 million more than it has appropriated this year. Most of the deficiencies will be offset by an anticipated lapse of $15 million in the Treasurer’s Debt Service account, a $13 million lapse in the Department of Children and Families budget, $2 million in the Office of Legislative Management budget, and $300,000 in the Auditors of Public Accounts budget.
Barnes also estimated the state will save an additional $55 million on top of the $65 million already estimated from the retirements and vacancies attributed to the State Employees Bargaining Agent Coalition agreement. He said the state has refilled about 990 jobs, some of which will help agencies, like the Department of Social Services, obtain further efficiencies.
But it’s also possible increased enrollment in the state employees Health Enhancement Program—negotiated as part of the SEBAC agreement—could drive another hole in the budget.
The SEBAC agreement assumed 50 percent of employees 50 percent of state employees would enroll in the program and 50 percent would opt out of the program and pay an estimated $1,200 more in premiums and a $350 deductible. That didn’t happen. Instead, 96 percent of state employees enrolled in the program, which helps promote health and the use of a primary care physician rather than an emergency room.
“The Health Enhancement Program is what it is, it’s in place,” Barnes said. “We’re moving forward. I am very pleased with the efforts the comptroller’s office has made to implement that program in a very short period of time and I remain optimistic about its long term benefits.”
He said he has no choice but to move forward aggressively with the program because providing health care to employees is part of the state’s contractual obligation.
Sen. Len Suzio, R-Meriden, told Barnes that in the long run he thinks the program can work, but he believes the estimates of $102.5 million in the first year of the budget is “highly optimistic.”
“In the short run what I’m concerned about is the viability of the health insurance budget and we’ll just have to see when we get a representative sample of claims information to be able to draw conclusions,” Barnes said.
He said health claims are a very difficult thing for the state to project.
The Office of Fiscal Analysis estimated Monday that the state will fall short of achieving its goal in the program.
In addition to falling short of its goal in the Health Enhancement Program, OFA estimated the state will have higher than expected insurance claims experience and it noted an increase in the University of Connecticut Health Center’s fringe benefit account for total deficiency of about $25.7 million in that area alone. No specific amount is directly attributed to the Health Enhancement Program.
Overall OFA is predicting a $65.2 million deficiency in the 2012 general fund. The difference in projections currently between OFA and OPM is about $32.3 million, but state Rep. Toni Walker, co-chairwoman of the Appropriations Committee, said a lot of the differences will be zeroed out once the state transitions from an HMO model of health insurance to a self-insured, Administrative Services Organization model. She said currently that transition accounts for a lot of differences between the two sets of projections.