Connecticut to lose $56M in sequestration, with education, social services to be hit hardest

At midnight, Connecticut’s public and private sectors face a combined loss of $56 million, with deep cuts to education, social services and housing as the federal game of budget brinksmanship runs out of time.

The state legislature’s nonpartisan Office of Fiscal Analysis on Friday released its latest projections of the impact cuts tied to federal budget sequestration would have on state and municipal governments, as well as social service and other nonprofit entities. The cuts would be phased in over the remainder of the federal fiscal year, through September.

And Gov. Dannel P. Malloy’s administration, which already faces a $131 million state budget deficit in the current fiscal year, has warned all state agencies and municipalities to be prepared to deal with funding losses without seeking supplemental help from the state budget.

“These cuts promise to be unnecessarily disruptive of government services and may also serve to further weaken Connecticut’s economy,” Malloy’s budget chief, state Office of Policy and Management Secretary Benjamin Barnes, wrote in a recent memo on sequestration.

“The state does not anticipate being able to make up for or replace funding reductions to state or local agencies resulting from either sequestration or from reductions that result from any federal budget deal,” Barnes added. “… Agencies must be prepared to reduce or cease program activities, or to absorb or shift funding around to live within reduced federal funding levels.

According to state legislative analysts, nearly 45 percent of the $56.1 million in cuts are aimed at education, job training or other workforce development programs. Nearly $7.6 million would be removed from special education alone, with another $1.2 million coming from state grants to improve teacher quality.

One of the state’s leading labor coalitions, the Connecticut AFL-CIO, estimated this week that the latter cut would hinder professional development for more than 1,500 teachers here.

John W. Olsen, state chapter president, blamed majority Republicans in the U.S. House for the damage, citing their opposition to further tax hikes on wealthy households and big corporations.

“Yet again, Republicans in Congress are threatening to throw the economy back into recession unless Democrats agree to benefit cuts to Social Security, Medicare, and Medicaid,” Olsen said. “They are willing to allow deep across-the-board cuts that hurt working families to go into effect rather than close wasteful tax loopholes and demand corporations and the richest 2 percent pay their fair share. We need to invest in our economy and our people by creating more jobs, not cutting them.”

Another major segment of latest sequestration cuts focuses on social services, health care and other community support programs.

As they are phased in, reductions of more than $4.3 million would come from public housing programs, with another $4.2 million removed from next winter’s allocation for the Low Income Heating Energy Assistance Program.

Commonly known as LIHEAP, the program — which serves about 150,000 poor Connecticut households — has struggled in recent years from steadily shrinking federal funding.

Connecticut’s share of federal LIHEAP funding for this winter stood at about $72 million, down from $79.5 million one year ago and from $98.3 million in 2010-11.

Another $2.5 million would be cut from a federal grant program that helps Connecticut pay for supplemental food assistance, health-care referrals and nutrition education for low-income women with children up to age 5.

Despite these cuts, many health and social service programs are exempt from sequestration, as are most transportation and income security programs.

A mechanism designed to limit the size of the federal budget, sequestration places a hard cap on spending in several broadly-defined areas. If Congress appropriates dollars in excess of these caps, it automatically triggers across-the-board cuts in all affected categories.

In this case, Congress exceeded limits set in the Budget Control Act of 2011, triggering $984 billion in cuts between 2013 and 2021.

The first wave of reductions, $109 billion, was supposed to take effect Jan. 2 of this year, but it was subsequently reduced to $85 billion and pushed back two months. These represent reductions of 5.3 percent for discretionary, non-defense programs and 5.8 percent for mandatory, non-defense programs.

“Today is a disappointing day, but, because sequestration’s cuts will be implemented gradually, there is still time for cooler heads to prevail,” U.S. rep. Joseph Courtney, D-2nd District, said Friday. “As I have since passage of the Budget Control Act, I continue to call for a balanced and bipartisan approach to deficit reduction that would prevent these sweeping, mindless cuts that will affect every American.”

A second crisis is set to take effect on March 27 unless Congress and President Obama authorize continued federal spending.

State legislative analysts offered an initial projection Friday that the government shutdown that would result from failed Congressional action would have a much lesser impact on Connecticut, trimming about $2.6 million.