With revenues lagging by nearly $60 million and projected deficits on the horizon, the Malloy administration is taking steps to bring the budget into balance.
On Wednesday, Budget Director Ben Barnes wrote to the heads of all the state agencies directing them to review their planned spending and to avoid any spending that isn’t “absolutely critical in nature,” and he instituted a hiring freeze.
“Effective immediately, hiring will be curtailed,” Barnes wrote in his letter to commissioners. And any permission Barnes’ agency previously gave to commissioners to hire personnel was officially revoked this week.
Barnes also asked that state agencies refrain from entering into new service agreements or extending or adding funds to existing agreements.
In addition to executive branch agencies, Barnes is requesting that higher education units, constitutional offices, and judicial and legislative branch agencies implement similar measures.
Last month, Barnes projected that the state would end the year with a $300,000 surplus. The figure was certified by state Comptroller Kevin Lembo on Nov. 1, but that was before the November consensus revenue estimates were released showing that federal grants, the gas tax, and gambling revenues were lagging behind the state’s projections.
Earlier in November, Republicans pointed out that there were more than $80 million in budget deficiencies, or overruns, beginning to pile up that the state would need to address. At the time, Malloy dismissed the deficiencies.
“Even on a cloudy day, Republicans want to make it cloudier,” Malloy said.
Malloy continued, “There are many budgetary lines in the budget, but on a net-basis we’re in great shape.”
But Sen. Rob Kane, ranking member of the Appropriations Committee, said he doesn’t think the Malloy administration is capable of making the difficult decisions when it comes to spending. He said he wouldn’t be surprised if tax increases were on the horizon.
Malloy campaigned on a promise not to increase taxes.
Kane said he plans to introduce legislation that requires nonpartisan fiscal analysts in the Office of Fiscal Analysis to put together budget numbers every month because he doesn’t trust the information coming from the administration.
On Wednesday, Barnes wrote that his office “has been monitoring expenditure trends in a number of agencies that may result in deficiencies which will exacerbate the revenue shortfall and result in a General Fund deficit if management actions are not taken right away.”
Barnes is in the early stages of developing Malloy’s next budget proposal, which will be released in February.