CTNJ file photo
OPM Secretary Ben Barnes (CTNJ file photo)

Gov. Dannel P. Malloy’s budget office told state agency heads Thursday to postpone cost-of-living increases and merit pay raises for non-union managers until Jan. 1, 2016.

In a memo to state agency commissioners, Office of Policy and Management Secretary Ben Barnes said that as budget talks begin there will not be an adjustment to merit pay plan salaries on Nov. 13 “as had originally been planned based on the enacted budget.”

The move, according to budget analysts, impacts about 1,600 non-union managers and would save the state about $5.1 million if the raises are postponed permanently. The legislature and Malloy already reduced raises for union and non-union employees by $13 million in 2017. But there’s more than $10 million in the 2016 budget for negotiations with almost all the state employee bargaining units except the state police.

Thursday’s announcement does not impact the raises awarded to 200 appointed state officials in December 2014. Those salary increases, which cost $1.4 million, will remain in place.

The announcement that the administration wants to delay the 3-percent cost-of-living increase and the 1.5 percent merit pay increase planned for about 1,600 managers comes just days before the administration sits down for its first meeting with legislative leaders to talk about mid-year budget cuts.

On Monday, Malloy announced that the state is running a $118.4 million deficit. Personal income tax revenue was short of projections by $109.3 million this month, according to Barnes.

Malloy invited lawmakers to help him resolve the weaker-than-expected budget numbers with a special session to cut spending. Last month, Malloy used his executive rescission authority to cut about $103 million from the budget.

Earlier this week, he invited lawmakers to offer their ideas about the $103 million in rescissions he made on Sept. 18 and the newly announced $118.4 million deficit.

On Monday, the governor made a point of saying he was looking at preserving core government functions, but that everything else was on the table.

“To some extent I’m trying to bring people back to the table so that we have a sustainable budget, which is predictable in the future and that we can accommodate in our spending plan and our revenue plan,” Malloy said Monday.

In his memo to state agency heads Thursday, Barnes asked them to review their budgets “with an eye toward identifying what activities are core government functions and what are not.”

Barnes added: “We must acknowledge that our budget reality today demands that we consider reducing or eliminating some non-core services. We should all be prepared to discuss these services in that context with the legislature in the coming weeks.”

Barnes also warned that they are redoubling their efforts regarding hiring.

“We will be redoubling our scrutiny of position refills and will require you to hold positions vacant longer than anticipated in those plans while we come to agreement on a deficit mitigation strategy,” Barnes wrote. “To that end, please defer all hiring that is not absolutely essential.”

Malloy and a bipartisan group of lawmakers are expected to meet for an initial discussion in his state Capitol office at 1 p.m. Monday, Oct. 26.