With three proposals on the table, legislative leaders and Democratic Gov. Dannel P. Malloy expressed confidence they will be able to close this year’s budget deficit next week with bipartisan support.
Democratic legislative leaders, who were the last to put forward a plan, presented a package of $191.7 million in spending cuts Wednesday.
The plan cuts about $56 million from state agencies and $16.7 million in town aid. It sweeps about $37 million from funds that are outside of the General Fund, asks the Judicial Branch to cut $9 million from its budget, and moves $25 million from the 2017 budget back to 2016. It maintains the funding for hospitals and most of the money for nonprofit providers. It also assumes $6 million in labor savings, which is the same number Malloy used when he used his rescissionary authority to cut $65 million from the budget last week.
However, the Democratic plan doesn’t close the estimated $220 million budget deficit and it doesn’t assume the same spending cuts as Malloy.
Republican legislative leaders proposed $220 million in spending cuts last week and some of the ideas they proposed do overlap with the plan put forward by Democratic legislative leaders.
Senate Minority Leader Len Fasano, R-North Haven, said the discussion during Wednesday’s hour long meeting focused on closing the gap in 2016 and didn’t necessarily focus on whether the cuts will reduce the $900 million deficit in 2017.
“There are ideas in here that will roll out,” Fasano said.
House Speaker Brendan Sharkey, D-Hamden, said his members don’t like having to make mid-year budget cuts, but they understand that “the bigger battle and the bigger problem is going to be coming in a few weeks.”
Rank-and-file lawmakers who met behind closed doors for two hours Wednesday wanted to know how many of the spending cuts would help resolve the 2017 budget deficit, which is currently $900 million. They also expressed concern about what programs would suffer as a result of the cuts, but Sharkey told them to save their fight for the 2017 budget.
Legislative leaders from both parties agreed to give the Appropriations Committee an additional week to come up with a plan to close the 2017 budget deficit.
Since the Democratic proposal fell short, Malloy had his staff look for an additional $27 million in spending cuts in order to balance that proposal.
Senate President Martin Looney, D-New Haven, said the $27 million in spending cuts was a “variety of things.”
Malloy said most of the $27 million in additional spending cuts “anticipates a smaller workforce.”
Malloy reiterated that layoffs will be necessary and will need to happen before June 9 in order to get the savings the state needs both in the short and long term.
“There are going to be layoffs. How many layoffs is dependent on a number of factors, not the least of which is retirements, which we’ll have a better idea of on April 1.”
However, Malloy warned that there will be no early retirement incentives offered to state employees.
“That is off the table,” Malloy said. “It was taken off the table the last time we got together. If you’re going to retire, you should retire. If you retire, in all likelihood you’re saving someone’s job.”
Malloy said government is getting smaller because it has to adjust to the “new economic reality.”
But there’s a lot of work to do.
The administration is in negotiations with almost all labor unions over salaries and working conditions. Malloy said he expects those negotiations, which won’t conclude in the near future, to have a bigger impact on the budget than any concessions he could get from state employees regarding health and pension benefits.
“You put them together we could have a big impact,” Malloy said. “You do neither, it has no impact.”