Gov. Dannel P. Malloy ordered nearly $48 million in emergency budget cuts Thursday, imposing the deepest cuts on social services, education and culture and tourism promotion.
The cuts, which do not require legislative approval, whittle the nearly $100 million deficit Malloy projected last week down to $52 million.
The governor also asked the Legislative and Judicial branches, whose budgets he cannot reduce unilaterally, to accept another $6.9 million in cuts. If granted, those potential reductions, along with $66,000 in reductions volunteered by the state’s watchdog agencies — which also are exempted from mandatory rescissions — would lower the deficit to $45 million.
And while the remaining shortfall represents only one-quarter of 1 percent of the state’s general fund – which covers the bulk of operating costs in this year’s overall $19 billion state budget, the potential for more red ink remains.
The administration’s deficit forecast does not account for potential under-funding in accounts to cover health benefits for retired state employees. And nonpartisan budget analysts continue to monitor a controversial assumption that the Department of Revenue Services will collect an additional $75 million in miscellaneous tax revenues this year, primarily through fraud detection and pursuit of delinquent taxpayers.
“As the governor has promised, we are managing and administering the budget so that there will be no deficit,” Malloy’s budget director, Office of Policy and Management Secretary Benjamin Barnes, wrote in a statement Thursday. “These rescissions are painful for some, but tough decisions are necessary to keep the state on firm fiscal footing. State government will live within its means, and we will not raise taxes.”
Social service agencies hit the hardest
The deepest cuts imposed Thursday fell on Connecticut’s social service agencies, which sustained almost 40 percent of the reductions.
The Department of Children and Families took the single biggest hit, losing $9.2 million.
The largest cut at DCF was made to residential treatment programs.
The agency for years has been decreasing the number of children it sends to live in group homes. On Jan. 1, 2011, there were 1,426 children living in congregate care homes compared to 663 children on Oct. 1 of this year.
Ron Cretaro, the executive director of the Connecticut Association of Nonprofits, criticized saving money by closing too many group homes.
“To date, DCF’s decision not to send teens to group homes in Noank, Norwich, two in New Haven, and Wolcott have resulted in closures. Two to three others may be at risk of closing within weeks,” he wrote the agency this week.
DCF Deputy Commissioner Fernando J. Muñiz responded to those complaints this week by saying DCF was “committed to maintaining youth in their communities in the least restrictive settings that can meet their needs.”
While child advocates have agreed with the department’s goal of keeping more children in homes with families, they’ve expressed fears the state hasn’t adequately funded support services in the community.
“Cuts to DCF’s budget must end,” said a recent report by Connecticut Voices for Children, which lobbies for the interests of vulnerable children. “Declining state support for DCF has increased the workload of social workers and prevented the agency from offering sufficient new services to support children in family and community settings.”
They report said state funding for DCF, which cares for 4,000 children on any given day, has dropped by $195 million over the last six years — a 20 percent reduction.
The Department of Developmental Services, which cares for clients with developmental disabilities, lost $5.5 million, including $2 million for day services and employment programs for clients with developmental disabilities.
Nearly half of the $3.2 million cut from the Department of Mental Health and Addiction Services came from personnel — which usually translates into a freeze on vacant positions — and from an “other expense” account typically used for consulting services and equipment. But the department also faced cuts to the behavioral health programs and services to help rehabilitate non-violent criminal offenders in the community.
Cuts to the departments of Social Services and Public Health also focused heavily on personnel, but included cuts to teen pregnancy prevention services, the state’s fatherhood initiative, needle and syringe exchange services for drug addicts, and programs for children with special health care needs.
Higher education faces budget cuts once again
Connecticut’s public colleges and universities — a frequent target of governors’ emergency cuts in the past because of the large operating grants they receive in the state budget — sustained almost $6.5 million in reductions Thursday. And that doesn’t include another $906,000 taken from administrative savings tied to an alternative higher education employee retirement program.
The Board of Regents for Higher Education, which oversees the four regional state universities, the community colleges, and the online Charter Oak State College, lost almost $2.8 million.
But almost all of the cuts were aimed at the four state universities, whose respective budgets are in relatively better shape than those of the dozen community colleges.
The state universities had $129.2 million in their emergency budget reserves at the start of the fiscal year. The community colleges, hit by declining enrollment and a dwindling share of state support, have seen their reserves fall to an all-time low of $12.1 million.
The Regents’ plans to turn the colleges’ finances around through an effort to increase enrollment – Transform CSCU 2020 – was cut by $1.2 million. That initiative included offering students who dropped out of college before graduating three free courses if they return.
Regents’ system spokesman Mike Kozlowski said he doesn’t think that that initiative will be impacted, and added that he doesn’t believe the recessions will result in layoffs.
The University of Connecticut lost $2.3 million from the operating grant for its main campus in Storrs and for its regional campuses, and another $1.3 million for the UConn Health Center in Farmington.
“We’ll work to manage the reductions in a way that doesn’t hurt UConn’s academic enterprise,” UConn spokeswoman Stephanie Reitz said. “In general, we expect to look at efficiencies in purchasing and other procurement actions, but it’s really too soon to say for sure.”
Reitz said it’s too early to tell if UConn will look to achieve savings by not filling vacant positions or tapping the school’s emergency reserves. UConn has $94.6 million in its emergency reserves.
The state’s public colleges and universities struggled to balance their budgets for the current fiscal year even before these midyear cuts. State funding has not kept pace with the salary increases the schools must provide their unionized employees because of a contract the Malloy administration negotiated.
Barnes wrote to agencies last week asking them to look for other opportunities to reduce spending. OPM also ordered a freeze on all-but-critical hiring.
Barnes added Thursday that, “As difficult as some of these reductions are to make now, there are more, even tougher choices as we look ahead to next fiscal year.”
Existing law gives the state’s chief executive broad discretion to reduce most accounts unilaterally by up to 5 percent whenever “the governor determines that, due to a change in circumstances since the budget was adopted, certain reductions should be made.”
Municipal aid cannot be reduced, though, without legislative approval.
Other spending areas, such as debt payments and unionized employees’ salaries and benefits, effectively are excluded from deep rescissions because of contractual obligations.
Sen. Beth Bye, D-West Hartford, co-chairwoman of the Appropriations Committee, said she’s concerned about the cuts imposed on child welfare services and mental health programs.
“The legislature has a collaborative relationship with Governor Malloy and OPM, and we’ll work together to solve this,” Bye said. “What I’m most interested in hearing about is whether any of these rescissions to health care affect mental health treatment, especially for children.”
Bye added that, “I need to better understand what that looks like, exactly, because I don’t want anything to negatively impact our care for adolescents who have mental health and behavioral challenges. And I’m sure we’ll be hearing from the colleges. But we have an obligation to maintain a balanced budget, and that’s what we’re going to do.”
The new House minority leader, Rep. Themis Klarides, R-Derby, charged Malloy had to make these cuts now because he and his fellow Democrats in the legislature’s majority failed to properly balance the budget when it was enacted last June.
“Clearly the governor failed to acknowledge what everyone else who was paying attention recognized: Connecticut has a lingering fiscal crisis that was never adequately addressed, either because of politics or woeful disregard for the truth,’’ she said. “This is just the first step forward that all sides must take together.’’
Dozens of tourism, cultural and business programs face cuts
The governor’s cuts also included just over $704,000 in reductions to the Department of Economic Development. And while other agencies sustained larger cuts in terms of dollars, the reduction in this area targeted the most programs.
The administration reduced funding for nearly 40 regional and cultural tourism grants, along with a small number of business programs.
Among the venues and events that sustained cuts were: the New Britain Arts Alliance, the Nutmeg Games, the Connecticut Science Center in Hartford, the New Haven Arts Council and the city’s Festival of Arts and Ideas, Mystic Aquarium, the Beardsley Zoo, and the Cultural Alliance of Fairfield.