The General Assembly is poised to vote Tuesday on spending cuts to close a $220 million current year deficit, but Gov. Dannel P. Malloy bluntly warned state employees Wednesday that layoffs remain an essential element of his plan to balance next year’s budget.
Malloy, who spoke to reporters after a meeting with legislative leaders left him optimistic about a bipartisan vote next week on a deficit mitigation plan, warned employees that he intends to shrink the workforce with layoffs, not retirement incentives.
“Let me be very clear to all state employees: There will be no early retirement plan,” Malloy said. “That is off the table. It was taken off the table the last time we got together. If you’re going to retire, you should retire. If you retire, in all likelihood you are saving somebody’s job.”
The Malloy administration is currently negotiating contracts with more than a dozen bargaining units, but the results of those talks are unlikely to be known until well after the new budget year begins July 1.
But even if the administration prevails in obtaining pay freezes, the governor said the size of the state workforce must shrink to reflect falling revenues. But the contracts could affect the number of layoffs, he said.
“Let me just say this. There are going to be layoffs,” Malloy said. “I’ve been saying it every time I meet with you all: There are going to be layoffs. How many layoffs are dependent on a number of factors, the least of which is retirements.”
Malloy said the key is a “sustainable” workforce, which he did not define. Labor savings are a major element of the administration’s approach to next year’s budget, not the current-year deficit.
“I think what we’re talking about is how many layoffs this year; how many layoffs in future years,” Malloy said. “All those things are contingent on getting agreements on a sustainable basis, which we don’t currently have, although we made progress.”
Democrats released a $191.7 million list of spending cuts they hope to vote on Tuesday, nearly $30 million shy of the projected $220 million deficit. Malloy suggested another $27 million in talks with Democratic and Republican leaders.
The cuts are heavy on one-time savings that would not help reduce the projected budget shortfall of $900 million in the next fiscal year. About $62 million of the $191.7 million are one-time savings. A Republican mitigation plan relied on $40 million in one-time savings.
The plan calls for cutting $15 million from the state’s nearly $2.5 billion Medicaid program. Specifics on where the savings would come from were not available, although a plan document said the cut would not affect funding for hospitals.
The Democrats’ plan also would cut:
- $4 million from the temporary family assistance program, a nearly $100 million program that provides cash assistance to low-income families. According to the legislature’s nonpartisan Office of Fiscal Analysis, caseloads in the program have declined in recent years. The governor’s budget proposal for the upcoming fiscal year calls for an $8 million cut to the program’s funding based on the reduced caseload.
- $85,025 from the Connecticut Home Care Program, which serves seniors who could be at risk of needing nursing home-level services without assistance.
- $350,000 from Connecticut Children’s Medical Center. Malloy last week rescinded $730,275 in funding for the Hartford children’s hospital, which had been expected to receive more than $14 million this fiscal year.
The hospital cut was among $79 million in emergency cuts Malloy made to offset falling revenues, two thirds of which hit social services and education. He said Wednesday some of those may be reversed in negotiations with legislators.
Malloy and the leaders say work will continue on the deficit plan, but House Speaker J. Brendan Sharkey, D-Hamden, and Senate President Pro Tem Martin Looney, D-New Haven, say they are committed to voting on a plan Tuesday.
Community service providers expressed relief that the Democratic plan did not hit them harder.
“We are grateful for all legislative proposals that make human services a budget priority, especially as the discussion shifts in the coming weeks to the spending plan for the coming year,” said Jeffrey Walter of the CT Community Nonprofit Alliance. “We encourage the General Assembly to adopt this plan, understanding that they are supporting life-sustaining services for a half million individuals who would otherwise have nowhere to turn.”
Arielle Levin Becker contributed to this report.