Following a Monday stop at a state agency headquarters, Gov. Dannel P. Malloy called the state’s projected budgetary woes a manageable problem and insisted his administration was taking steps to address it in a transparent fashion.
The state has known since just after the election that it likely has a budget deficit on its hands. A consensus revenue report from two separate non-partisan fiscal offices found that tax revenues have lagged by $128.1 million less than what was budgeted. And with greater than expected enrollment in Medicaid, the budget is on track to end the fiscal year $365 million in the red.
The governor, visiting the Department of Developmental Services’ Hartford headquarters, compared the shortfall to the close to $20 billion total state budget.
“When you put it in the context of $20 billion we’re not talking about a gigantic problem, we’re talking about a problem that is entirely manageable. That’s why we’re being transparent about it and we’re going to do it,” Malloy said.
Malloy has ruled out raising taxes and on Monday said he’s not inclined to layoff the small population of state workers who aren’t guaranteed layoff protection by the 2011 state employee benefit concession package.
That means he will need to cut spending. Malloy has some authority to cut from the budget directly. The governor can cut 5 percent of any appropriation and 3 percent of any fund in a financial crisis without legislative approval. But to close a $365 million shortfall, he’s going to need lawmakers to approve further spending reductions.
Lawmakers are likely to convene a special legislative session before Christmas to address the budget. Malloy said he expects the process to be bipartisan.
“I can’t say what each member’s response will be but I think there’s an appreciation by Republican and Democratic legislative leadership that we need to get this done, that it should be gotten done sooner rather than later,” Malloy said.
Legislative leaders on both sides of the aisle have issued statements indicating they would like to move quickly to right the state’s fiscal course. But Republicans have also been critical of Malloy and the Democrats, who they charge haven’t been transparent. During the last legislative session, they voted to move the revenue report, typically released in October, until after the election.
Democrats said they moved the date so the report would reflect a more accurate financial picture. Republicans argued it was to avoid fiscal accountability during the election.
Though he accused the governor of being less than transparent last week, House Republican leader Lawrence Cafero seemed eager to work with Democrats to close the shortfall.
“A special session dedicated to dealing with the state’s deficit of $365 million for the current fiscal year can be efficient and organized if we get Democrats and Republicans and their respective staffs to work together ahead of time,” he said last week in a statement. “It need not be a protracted session with hours of debate if there is a cooperative effort ahead of time.’‘
Malloy said to expect details of his deficit mitigation plan soon, starting with what he has the authority to cut.
“I’ll take the lead in announcing rescissions so people know we’re finding the dollars that we can contribute to this within our organizations and not requiring statutory action but the legislature doesn’t give us a lot of rescission authority,” he said.
Some of those cuts could come from the Developmental Services Department, where Malloy helped launch the agency’s new mission statement Monday. After thanking the staff and reading proclamation during the ceremony, the governor acknowledged DDS will need to find ways to deliver services in less expensive ways.
“I think everyone will be asked to contribute to savings. That’s a reality, that’s why we’re out in front of this thing and transparency will be really important,” Malloy said.