A few weeks before the 2017 state budget goes into effect, Gov. Dannel P. Malloy administration budget director Ben Barnes is warning state agencies to expect steep reductions in discretionary spending for the next two years.
“Over the next two years, we have an opportunity to realign state government in a way that will be sustainable and responsive,” Barnes said in a June 8 memo to agency commissioners. “This budget will enable us to garner the public support needed to continue providing the most critical public services into the future, while we make determined progress on the long-term stability of our state finances.”
And while cutting $847 million in spending from the 2017 budget was difficult, Barnes said that 2018 will be even harder due to slower than expected revenue growth.
“Fixed costs for pensions and health care mean most agencies will likely face discretionary spending reductions of at least 10 percent below FY 2017 levels in FY 2018. As a result, we will be significantly challenged to provide all of the services and programs that many have come to expect,” Barnes wrote.
Earlier this year, the heads of Connecticut’s executive branch agencies were asked to identify core services within their agencies and to prioritize spending around them. Since that time 719 executive branch employees have been laid off.
Barnes asked state agency heads to take the reduction in their workforce into consideration as they revise the plans they submitted following passage of the budget in mid-May.
State agencies have until this Friday to submit their revised spending plans to the Office of Policy and Management.
No decisions have been made yet about how the $20 million in municipal aid Malloy vetoed from the state budget will be apportioned to cities and towns.
Earlier this week, the Senate decided not to override Malloy’s veto of municipal aid. Malloy said in his veto message that the cut was necessary to balance the budget without passage of his bail reform initiative.
Senate President Martin Looney, D-New Haven, said Monday that overriding the governor’s budget vetoes would be “largely symbolic,” because the governor has “significant recession authority, lapse authority” — up to $170 million — and he’s going to continue to use that authority to make cuts.
It’s still unclear if there will be more layoffs.
The 2017 budget reduces salary accounts by $255 million and asks the administration to find an additional $69 million in employee savings.
“In many cases, I expect agencies may need to further reduce, or perhaps cease delivering altogether, certain programs or services, and additional headcount reductions may be necessary,” Barnes wrote.
Barnes said what is clear is that 2018 will be even harder than 2017.
“FY 2018 will be even more challenging than FY 2017,” Barnes wrote.
He asked state agency commissioners to stay strong in the face of criticism over the budget reductions.
“Many of the choices we will make in the coming year will be criticized, but we should remain confident that we can make important changes to state government while holding true to our ideals and our values,” Barnes wrote.