HARTFORD, CT – Office of Policy and Management Secretary Melissa McCaw asked state agency heads Monday to “eliminate expenditures that are not absolutely critical in nature.”
In the memo McCaw sent Monday afternoon to state agency heads she details the budget deficit, and signaled that she’s going to ask them for spending cuts after Jan. 20.
McCaw pointed out that revenues are $83.5 million behind projections and spending is exceeding budget levels by $104.2 million.
“While the projected shortfall represents a relatively small percentage of the overall General Fund budget, given the likelihood that further spending reductions will be necessary to ensure both balance and spending cap compliance for FY 2021 and beyond, it is imperative that management actions be taken immediately to ensure budget balance is maintained,” McCaw said in this Jan. 6 memo.
In the meantime, McCaw said the governor has directed each agency head to review their spending for the remainder of the year and eliminate unnecessary spending.
“Your efforts should include potential savings in all areas of spending, including hiring and overtime, travel, contractual services, and purchased commodities,” McCaw said. “Given that a component of your plans must of necessity entail tightened hiring, please note that OPM will closely scrutinize all requests to establish new positions or refill vacant positions, as well as for discretionary promotions. Agencies should ensure that only the most critical position actions are undertaken for the remainder of the fiscal year.”
State Comptroller Kevin Lembo predicted on Jan. 2 that the state would end the fiscal year with a $28 million deficit, which is slightly higher than the $23 million predicted by McCaw.
At the same time, both are predicting there will be at least $2.5 billion in the Rainy Day Fund by June to help cover any shortfalls.
Still, McCaw is signaling mid-year budget cuts to a budget that was originally predicted to end the year $140 million in the black.
State law gives the governor discretion to make budget cuts if he fears the current resources won’t be able to finance all the proposed spending.
Under Connecticut law, Lamont has the power to unilaterally cut any line item in the budget by 5% or less.
Over the past decade, Connecticut governors have rescinded spending mid-year 10 times, according to records kept by the Office of Policy and Management.
The CT Community Nonprofit Alliance is concerned about what this might mean for the state services nonprofits provide to some of Connecticut’s most vulnerable citizens.
Gian-Carl Casa, president and CEO of the CT Community Nonprofit Alliance, said he’s concerned that “there is any discussion of emergency budget cuts.”
Casa, who worked at the Office of Policy and Management during the Malloy administration, said they appreciate that the governor “is managing the state budget prudently,” but would urge him to reject any proposal that cuts essential services.