Gov. Ned Lamont’s administration expects state agencies to leave more than $415 million unspent this fiscal year, nearly triple the savings required to balance the budget.
But with two-thirds of those unspent funds in eight health care and human service agencies — including nearly $80 million tied to vacant jobs — legislators and labor are questioning whether the administration is making progress reversing a staffing crisis and responding to growing health care needs.
“When you start to lose money in personal services in human service agencies, you’re denying services to people,” said Rep. Toni E. Walker, D-New Haven, co-chairwoman of the Appropriations Committee, who added that most of these services were set up for society’s most vulnerable. “You’re making it more difficult for government to help people. … This is what government is supposed to be about.”
“The state’s top public hospitals are denying urgent health care and mental health services every day to men, women and children seeking recovery,” said Rob Baril, president of SEIU 1199NE, the state’s largest health care workers union. “We have over 2,000 vacancies in state health care positions. But instead of investing in meaningful recruitment and retention strategies to attract health care workers, Connecticut is piling up millions of dollars in hiring lapses.”
Walker and her colleagues on the Appropriations Committee will be hard-pressed to fund all demands for more resources when they propose a budget in mid-April for the next two fiscal years.
Despite the huge surpluses government has amassed since 2018, a recently renewed spending cap and other fiscal guard rails will limit growth as Connecticut focuses instead on whittling down a massive long-term debt of nearly $90 billion.
Legislators say it’s hard enough crafting a new budget that will won’t meet all demands when interest groups can see state agencies leaving big dollars unspent.
The CT Community Nonprofit Alliance, which represents more than 500 nonprofits that deliver the bulk of state-sponsored social services to the disabled, estimates the industry’s annual compensation from the state is $482 million below 2007 levels after adjusting for inflation.
Lamont didn’t propose any rate increase for this group in his new budget, and Gian-Carl Casa, the alliance’s president and CEO, said nonprofits would put any extra funds they receive to use helping those in need — right away.
“They are ready, willing and able to do any work that needs to be done,” he said. “They are in the community, they are closest to the need, and they can be responsive to that need.”
Sen. Cathy Osten, D-Sprague, the other co-chair of the Appropriations Committee, suggested that if agencies keep leaving money unspent, some legislators might think they should get less.
“Maybe the administration doesn’t need the positions that it has,” she said.
But Osten, Walker, many other legislators and state employee unions long have insisted state government’s big problem right now is too few employees, not too many.
Under Lamont’s predecessor, Gov. Dannel P. Malloy, the Executive Branch workforce shrank almost 10% between 2011 and 2018. Malloy and the legislature frequently used attrition and a shrinking workforce to help close numerous budget deficits as the state’s economy was slow to recover from the recession of 2007-09.
About 4,400 state workers retired between Jan. 1 and June 30, 2022 — just before new limits on state pension benefits took effect. That’s roughly twice the number of retirements in a typical year.
Shortly before state officials adopted the budget last spring, all Executive Branch agencies — excluding public colleges and universities — had collectively filled 25,700 of the 30,080 positions authorized for them in the state budget.
The 17% vacancy rate was almost double where it stood two years prior.
But the administration says not everything is dire.
A big share of the $274 million unspent across human service agencies, about $170 million, involves the federal Medicaid program covering a larger share of state health care service costs than anticipated, said Chris Collibee, Lamont’s budget spokesman.
State officials likely will carry forward many of this year’s unspent dollars to use in the next budget cycle, based on past practice. But if history is any guide, the administration could leave a lot of money unspent again next year.
Legislators assume every year that some portion of the state's budget, which currently exceeds $24 billion, will go unspent because of turnover, adjustments in caseloads, programs that don't start on time and other variables, and they typically build a savings target into the budget's bottom line. But the Lamont administration has been surpassing those savings by wide margins since he took office in 2019, often helped by higher-than-normal vacancy rates in state agencies.
Unspent funds in salary accounts “are the direct result of an extremely competitive hiring marketplace, particularly in the health and human services sector of the economy,” Collibee said.
Over the past year, the Executive Branch workforce headcount has increased by about 850 employees, Collibee said, adding that Lamont included “significant resources in his budget proposal to enhance workforce development, including assistance with child care, to help train and fill open positions.”
But labor officials note that’s relatively modest compared with the jobs state government has lost over the past 12 years.
Baril said staffing issues have left the Albert J. Solnit Children’s Center in Middletown, a Department of Children and Families facility providing mental health services, operating below 50% capacity.
“How much longer will patients and families desperate for care have to wait for urgent action?" he asked, adding that better compensation and improved working conditions are needed now. “This is a crisis with solutions. … All unused funding should be immediately reinvested in expanding services and saving lives.”
Wilfredo Medina, president of AFSCME Local 714, which represents about 1,100 Department of Social Services employees, said offices are “massively understaffed” even as demand remains high for food stamps, Medicaid and other government support.
"It is a dangerous path to bank budget savings in our agencies when demand is high for social service programs,” Medina added.
Unions also have complained that, in many health care jobs, workers are being pushed excessively to work overtime.
The legislature’s nonpartisan Office of Fiscal Analysis reported that through the first six months of this fiscal year, between July and December 2022, the state spent $160 million on overtime, about 11% or $18 million more than it did during the same period one year prior.
Three of the five departments with the most overtime spending over the past two years were human service agencies, according to nonpartisan analysts: the Departments of Mental Health and Addiction Services; Developmental Services; and Children and Families.
Across all state departments, not just human service agencies, more than $100 million from salary accounts is projected to be unspent.
And Osten said Lamont administration efforts to streamline hiring since the retirement surge in 2022 largely have not been successful.
“The fact is it just doesn’t work,” she said. “We can’t — at the same time — complain about overtime if we’re not filling positions.”