Malloy directs agencies to save $130M to balance new CT budget

Gov. Dannel P. Malloy assigned nearly $130 million in total savings targets Thursday to dozens of state agencies to help balance the new state budget that begins Friday.

Although legislators had set limits in some cases to spread the burden out among as many agencies as possible, the cuts fell heaviest on social services and education.

The administration, which must achieve nearly $190 million in savings after the 2016-17 fiscal year gets underway, is expected to assign the remaining savings targets later in the budget year.

These assignments are crucial to meet the governor and legislature’s goal of closing a nearly $1 billion deficit in 2016-17 finances without increasing taxes.

Budget director Benjamin Barnes visiting the Capitol press room to report on state revenue forecasts.

CTMirror.org File Photo

Budget director Benjamin Barnes visiting the Capitol press room to report on state revenue forecasts earlier this year.

“We worked closely to identify these savings and greatly appreciate the cooperation of agencies and the Legislative and Judicial branches in this process,” Office of Policy and Management Secretary Benjamin Barnes, Malloy’s budget director, said Thursday. “With timely and realistic plans to achieve these savings that were included in [the] revised budget, we are taking this proactive step to adjust to our new economic reality before the fiscal year begins. We must focus on our core services, and we must ensure that [we] do not spend more than we take in. We’re going to continue to ensure balance in our budget and will continue to take the steps necessary under the authority granted to us.”

According to a list of savings targets released Thursday by the administration, about $14.2 million will come from the Department of Education, including $4.9 million from vocational-technical schools and $3.3 million from charter schools.

Another $19.2 million in total will come from the University of Connecticut, the UConn Health Center in Farmington, and from the community colleges and state university system.

These reductions are in addition to the deep cuts that were already specified for numerous line items in the adopted state budget.

Social services comprise a significant portion of the state budget, and already have faced deep cuts over the previous two fiscal years.

Savings targets assigned to five departments — Social Services, Children and Families, Mental Health and Addiction Services, Developmental Disabilities, and Public Health — totaled $27.4 million.

To help agencies achieve those savings, the administration typically employs “holdbacks.” This involves withholding an amount equal to each agency’s savings target from the initial allocation of funds awarded at the start of the fiscal year. If an agency struggles to function without those dollars, it can appeal to the budget office to release the “holdback,” but nothing is guaranteed.

The Judicial Branch, which has ordered 239 layoffs and eliminated more than 60 temporary positions, was assigned nearly $20 million in savings targets. Those assignments were anticipated when the layoffs were ordered in May.

Almost $10.7 million in savings must come from the Department of Correction. The administration anticipates closing another prison, hoping anti-recidivism programs will continue to reduce Connecticut’s inmate population.

More than $4 million was taken from the Department of Economic and Community Development, with much of that money coming from tourism promotion funds and grants to various cultural and tourism attractions.

The $19.76 billion overall state budget legislators enacted for 2016-17 assigned many budget cuts directly to agencies and departments.

But the new spending plan also relies heavily upon the Executive Branch to find big cost-savings with minimal or no direction from legislators.

Minority Republicans have said the Democrat-controlled legislature relies too heavily on these savings targets to avoid making tough decisions themselves during a state election year.

Despite setting aggressive savings targets over the past two fiscal years, state government finished with deficits both times. The 2014-15 fiscal year closed $113 million in the red, and the legislature’s nonpartisan Office of Fiscal Analysis says 2015-16 is likely to close $322.9 million in deficit.

“The Democrat legislators built these cuts into their budget, but left the dirty work of identifying what programs would be targeted up to Governor Malloy,” Senate Minority Leader Len Fasano, R-North Haven, said. “Democrat lawmakers cannot run from these cuts. They own them as much as they own the painful, shortsighted budget they voted for. Democrats gave Governor Malloy the sword and now he’s using it.”

“Republicans offered alternatives to the governor and Democrats on budget cuts that did not hamstring vital state services while we were mindful of the need to rein in spending,” said House Minority Leader Themis Klarides, R-Derby. “Yet, we were barred from budget talks. We did that because we recognized the critical importance of not ceding the legislature’s responsibility to formulate a responsible budget. We have already heard from various groups on how these cuts will roll out. Absent a long-term plan that Republicans have laid out, more of these painful cuts are likely to continue.”

Fasano added that “many of these cuts target some of the most vulnerable populations in the state,” but come at the same time UConn has awarded big raises to its highest-ranking administrators. “Why does top staff get to enjoy excessive raises even as more cuts come in?”

But Democratic legislative leaders have said they have taken steps to ensure these cuts won’t be too painful.

In some cases, the Malloy administration was prohibited from reducing payments to hospitals and education grants to municipalities. To hit another savings target, the administration was barred from taking more than 1 percent from any particular agency.

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