Lawmakers prodded on promise to find $50M in savings

Nearly one month into the new fiscal year, the legislative panel charged with identifying $50 million in cost-saving ideas still hasn’t completed its work, Gov. M. Jodi Rell’s administration wrote in a rebuke to the group’s leaders.

The head of the Office of Policy and Management, the governor’s budget agency, also reminded the Commission on Agency Outcomes that it had failed to meet its responsibility to find a much smaller savings package last fiscal year.

“Fiscal year 2011 is already underway and unfortunately the administration still has no guidance or specific plan from the commission or the General Assembly for achieving these savings,” OPM Secretary Brenda L. Sisco wrote the commission’s co-chairmen, Sen. Gayle Slossberg, D-Milford, and Rep. James Spallone, D-Essex. “Given the precarious nature of the state’s recovery from the recession as well as the significant amount of borrowing that was included in the adopted FY 2011 budget, fiscal prudence demands that the commission … provide a final plan, endorsed by the General Assembly, as quickly as possible.”

Sisco asked that the 21-member panel, which was created in 2009 and faces a Dec. 31 deadline, complete its work within the next 30 days. “Waiting until December 31, 2010 for your group to release recommendations will leave less than half of the fiscal year to implement any proposed restructuring, and will result in unachievable savings.”

Spallone said Friday that he would be happy to meet with administration officials regarding their concerns, but “I prefer not to exchange statements in the media regarding this important work.”

Slossberg could be reached for comment Friday.

The commission has met once, on June 21, since the $19.01 billion budget for this fiscal year was adopted on May 5, the last day of the regular legislative session. It is scheduled to meet at 9 a.m., Wednesday, at the Legislative Office Building.

At stake is a $50 million “lapse” or unidentified savings built into the new budget, which already has some big question marks.

The budget relies on $365.6 million in additional federal stimulus funds that have been proposed but not yet approved by Congress. The National Conference of State Legislatures has been warning since April 20 – two weeks before this fiscal year’s state budget was adopted – that this potential funding was in jeopardy.

The state legislature’s nonpartisan Office of Fiscal Analysis also declined to include the proposed funds in a revenue forecast issued in early May. The legislature and Rell nonetheless chose to build those dollars into the budget.

The $50 million worth of money-saving ideas owed by the commission isn’t the only lapse built into the new budget.

The spending plan also includes another $255.6 million in savings state government must identify among several areas, including payroll accounts, outside consultant contracts, equipment and other expenses.

Rell and the legislature built more than $473 million in undefined savings targets into the $18.64 billion budget approved for the 2009-10 fiscal year, which ended on June 30.

But cost overruns totaling about $190 million spread across several agencies ultimately pushed total appropriations for last year to $18.83 billion.

Sisco noted in her letter that the commission was supposed to identify a more modest savings last fiscal year, $3.5 million, but failed to adopt a specific plan to meet that goal.

Both Slossberg and Spallone have said they believe the panel did meet its charge last fiscal year.

An initial report released in February included several recommendations. One of those involved moving the health care program within General Assistance, the state’s welfare program for single adults without children, under the umbrella of the federal Medicaid program. Nonpartisan legislative analysts have estimated the annual savings at $68 million.

That concept has been recommended by several other groups in both the public and private sectors, including the legislature’s Appropriations Committee. But it was endorsed by the full legislature and governor last fiscal year.