(Updated 8:01 p.m.) Gov. Dannel P. Malloy is following through on his promise to end the year in the black by cutting nearly $79 million from the current budget.
Malloy’s decision to use his rescissionary authority to keep his first budget in the black will have a “relatively small impact” on state services according to the governor himself, but it’s possible others may disagree.
“Last year we were on the brink of the abyss with the largest per capita deficit in the nation. Today we’re talking about an adjustment of less than one percent,” Malloy said trying to put the proposal into perspective.
He said the cuts amount to 0.26 percent of total state expenditures.
Some of the $79 million Malloy cut Tuesday has already been included as part of the $900 million in lapses accounted for by the administration. The exact breakdown of which line items may be counted twice in the rescission list and also as a lapse were not immediately available.
In addition to the nearly $79 million cuts, Malloy’s Budget Director Ben Barnes is tightening his controls on state hiring. He said his office will review requests to refill about 740 executive branch agency vacancies.
Earlier this year the administration planned to leave about 2,300 executive branch jobs vacant, while it planned to fill 990 executive branch positions. Barnes estimated about 250 of those vacancies have been filled.
“Approvals will be granted only where the hire or refill is clearly justified and funding, after rescissions, is available to support anticipated costs,” Barnes wrote in a letter to Malloy.
“In some cases we may be squeezing contractors and we may be delaying certain activities until July 1,” Barnes said describing the cuts.
He said they have the power to make even greater rescissions, but are constrained in some instances. For example, things such as federal entitlement programs like Medicaid that can’t be cut, he said.
He said they believe the Legislative branch, which was cut about $800,000 in the proposal, is going to lapse millions of dollars this year in personnel costs based on their spending.
“We included them on the list because we thought it was appropriate to include everyone on the list,” Barnes said.
But legislative leaders say they’re not leaving anything to chance.
“We’re calling for a meeting of our chiefs of staff of our four legislative caucuses so that we can take steps as quickly as possible to make sure we hit that target. That will be done,” Sen. President Donald Williams said at an unrelated press conference Tuesday.
The Judicial branch received a $5.76 million cut to its budget.
The Department of Children and Families received more than $28 million in cuts, which was one of the biggest cut to any of the state agencies. About $10.5 million of those cuts are in personnel services where many of the positions are currently vacant.
“Clearly we are not going to withhold placement for children in our care or threaten the safety of any individual,” Barnes said Tuesday.
Department of Economic and Community Development Commissioner Catherine Smith, whose budget was cut by $1.9 million, said she didn’t believe it would have too much of an impact on her agency’s ability to help grow the economy. She said her agency has been a little bit understaffed so the $475,000 cut in personnel services is likely vacant positions.
The governor has the authority to rescind up to 5 percent of any line item, but can’t touch municipal aid without legislative approval.
The governor’s decision to use his rescission authority is largely based on declining state revenues, which have brought his budget to the precipice of a deficit. On Friday his budget office estimated the state’s surplus was about $1.4 million, down from $83 million a few weeks ago.
But if Generally Accepted Accounting Principles are applied the state’s deficit is about $73.6 million.
The Malloy administration says it will follow GAAP accounting and presenting the list of rescissions Tuesday seems to acknowledge that the administration means what it says, even if it can’t count on a $75 million surplus at the end of the year to make the first payment toward the $1.7 billion deficit created by GAAP.
House Minority Leader Lawrence Cafero, R-Norwalk, said “while he’s happy Malloy is making the cuts, he still isn’t giving the legislature enough information about where the state stands on the budget.
“Are these lapses? Are these new cuts? I think the governor said these are on top of the lapse cuts,” Cafero said. “But I defy anybody to make heads or tails of it.”
He said the legislature is going into session and if it doesn’t have the information it can’t do its job.
“Our own independent Office of Fiscal Analysis can not get the information,” Cafero alleged.
He said the kicker is that Malloy proposed a historic increase in taxes last year so we wouldn’t have to cut, now he’s saying faced with “a significant amount of financial uncertainty” for the next two years, you have to cut.
“None of this is verifiable. The revenues aren’t coming in. We don’t know whether or not they’ve achieved the ‘cuts’ they’ve hoped to achieve and we’re six months into the fiscal year,” Cafero said. “I think this is the first of several rescissions you are going to see because the revenues aren’t coming in and the cuts aren’t being made pure and simple.”
Sen. Minority Leader John McKinney said he had his staff review Malloy’s proposal and they believe some of the cuts are double counted, which means the state may still be in deficit under GAAP.
“After an initial review by my staff, it appears that as much as $41.7 million of the governor’s proposed rescissions have already been identified as lapses,” McKinney said. “That means that even if all proposed rescissions are implemented, absent further action, the state would still face a $31.9 million deficit.”
