Seeking to close a growing budget deficit in a sluggish economy, Gov. Dannel P. Malloy ordered $170 million in cuts Wednesday that will reach virtually all major state agencies.
Those cuts will reduce the state budget deficit by $123 million because the other $47 million in reductions had already been planned as part of the overall budget.
While agencies from the Department of Social Services to the University of Connecticut are being affected, the cuts Wednesday represent only the first round of reductions. They also represent the traditionally easiest items to cut. The pain, lawmakers say, is down the road as Malloy and the legislature try to close the full $365 million gap in the current fiscal year and nearly $1.2 billion in the fiscal year that starts on July 1.
The cuts Wednesday hit more than 275 different programs in a wide variety of services, including $2 million from magnet schools and $1 million from priority school districts that have been underperforming. The overall education cuts at the elementary and high school level is $8.426 million, including $1.1 million from the regional vocational technical school system.
Malloy is sensitive about cuts to education because he pushed for reforms of the public schools. Some of those reforms were heavily watered down to the point that some Republican Senators voted against them. The overall votes, however, were overwhelmingly in favor of the final bill. It passed unanimously in the House and by 28 to 7 in the state Senate.
The cuts are necessary because state tax revenues are coming in slower than expected. Malloy says that the Christmas shopping season will be an important barometer of the state economy and the state budget. If Christmas sales are better than expected, the state will be collecting more money from the 6.35 percent sales tax. If the stubbornly high unemployment rate continues, more workers will be out of jobs and they might spend less money on Christmas presents. Those questions will not be fully answered for about a month.
The cuts also include about $1.5 million for the board and care of foster children to $55,000 for family violence outreach and counseling.
One of the reductions is $28.4 million in fringe benefits for state employees under the health services account.
Malloy’s budget chief, Ben Barnes, said that the state’s expenses are currently “running less than we originally budgeted” for this year. “We will obviously meet all our obligations to provide those health benefits,” Barnes said.
Under the law, Malloy can cut a maximum of 5 percent in any particular budget line. Large budget cuts can only be made with approval by the legislature.
Some of the biggest items include a cut of $10.2 million for the University of Connecticut, including $9.6 million in operating expenses. That total, however, represents a tiny fraction of UConn’s overall budget.
The reductions include $7.1 million from the regional community-technical colleges and another $7 million from the four-branch Connecticut State University system that has college campuses in New Britain, New Haven, Danbury, and Willimantic.
“Nobody likes cutting services,” said Roy Occhiogrosso, Malloy’s senior adviser and chief spokesman.
State Senate Majority Leader Martin M. Looney of New Haven said the legislature is prepared to work with Malloy in a special session in December.
“Making cuts like these is never easy; however, given the current shortfall, they were unfortunately necessary in order to bring our budget into balance,” said Looney, a former House member who is one of the longest serving legislators. “Just as we did two years ago when we worked to erase a $3.65 billion structural deficit, we are committed to working with Governor Malloy to reduce spending and make the difficult but essential choices necessary to balance the state’s budget before the new year.”
Many of the agencies will have cuts in “personal services,” which includes overtime and salaries saved from unfilled positions. Unionized state employees will not be laid off as part of an agreement that was reached last year with Malloy.
“We focused on reductions that we can accomplish through attrition over the course of the year,” Barnes said when asked about potential layoffs.
Since Malloy has little direct control over the legislative and judicial branches, he did not release line-item cuts for those branches. But he called for $5.75 million in cuts in the judicial branch that runs the state’s court system, along with another $3 million cut from the legislative branch.
The Courant’s Josh Kovner reports on the Department of Children and Families:
DCF, with an annual budget of more than $800 million, absorbed an $18.3 million cut. Nearly half of that came from funds that pay for children to live at residential treatment centers - the most expensive form of care.
The department over the last 20 months has been steering children away from the campus centers and into foster care and other community-based programs – so the agency can take this monetary hit without significantly affecting services to children, said longtime DCF spokesman Gary Kleeblatt.
The number of children in DCF care overall has dropped 13 percent since January 2011, and the number of children placed with relatives has increased.
“That’s a good thing for kids, and it’s allowed the department to realize some savings,’’ Kleeblatt said Wednesday. “These are difficult times, and we have to do more with less, but we’re fortunate to be experiencing a positive trend.’’
State Sen. Rob Kane, the ranking Republican on the budget-writing appropriations committee, said that the cuts should have been made another way.
“In DCF, there was $18 million in cuts to programs. Listen, we have $30 million in administrative salaries,’’ Kane said Wednesday night. “I’d rather see us cut some bureaucrats in Hartford, rather than cut programs for people who need it. The real work gets done by social workers.’’
“The Department of Developmental Services is currently reviewing the rescissions and reductions announced today,’’ DDS Commissioner Terrence Macy said. “These fiscal issues are not unique to Connecticut, and we plan to work hard with our providers and families to maintain services for our most vulnerable citizens, while at the same time reduce costs.”
The Courant’s higher education reporter, Kathy Megan, reports:
Facing $14.4 million in cuts, Philip E. Austin, interim of the Board of Regents for Higher Education, said in an e-mail that the cuts to the state’s universities, community colleges and Charter Oak State College “will be difficult to absorb across our campuses, but the state is facing a budgetary shortfall and we must operate within the limits imposed by available state resources.”
Austin said he will be working with the system’s financial officer and presidents to determine how these cuts will impact the colleges and universities and will present a plan to the Board of Regents. The majority of the cuts are almost evenly divided with a $7.2 million cut for the community college system and a $7.1 million cut for the state university system. A few other cuts to the regents system include a $122,804 cutback for Charter Oak State college and a $63,729 cut for the Board of Regents for Higher Education.
“It’s obviously our intent to keep the cuts as far away from classroom instruction as possible,” Austin said in the e-mail, “understanding that there will be many tough choices ahead for us. At the end of the day, our primary focus must remain on student success and the programs that help support that effort.”
On the $10.3 million cut to the University of Connecticut, President Susan Herbst wrote in an e-mail to the university community that her approach will be “to protect what is most vital to us: our core academic missions of teaching, learning, and research, including the much-needed faculty hiring initiative that is underway. We will not halt our faculty hiring plan, and will keep building our research infrastructure.”
Herbst said the cut means that UConn will lose five percent of its state appropriation for the current fiscal year. With fringe benefits calculated in, she said the total reduction in state support is $15 million.
“Today’s announcement was not a surprise,” Herbst said in the e-mail, “and as an institution, we know we must work with the governor as we share in the necessary sacrifices.”
She said that “painful cuts will have to be made to many non-academic areas, but we will absolutely not allow them to endanger the work of our faculty or the academic success of our students, which are, after all, the reasons we exist.”
Austin’s full statement is as follows:
“There is no doubt that the cuts to the state universities, community colleges and Charter Oak State College will be difficult to absorb across our campuses, but the state is facing a budgetary shortfall and we must operate within the limits imposed by available state resources. Over the coming days, I’ll be working with our system’s chief financial officer and the presidents to determine specifically how these cuts will impact the colleges and universities and develop a plan to present to the Regents. It’s obviously our intent to keep the cuts as far away from classroom instruction as possible, understanding that there will be many tough choices ahead for us. At the end of the day, our primary focus must remain on student success and the programs that help support that effort.”
Herbst’s full statement is as follows:
“To the University Community,
As you may have seen, in response to a widening state budget deficit, Governor Malloy’s administration announced earlier this afternoon that rescissions will be made to Connecticut state agency budgets. This means that the University will lose five percent of our state appropriation in this fiscal year, which will be $10.3 million for the Storrs and regional campuses. When fringe benefits are calculated, the total reduction in state support is approximately $15 million. Like the rest of state government, UConn has had to weather similar budget cuts and rescissions in recent years as our economy has struggled. Today’s announcement was not a surprise and as an institution, we know we must work with the governor as we share in the necessary sacrifices.
My approach in this instance will be to protect what is most vital to us: our core academic missions of teaching, learning, and research, including the much-needed faculty hiring initiative that is underway. We will not halt our faculty hiring plan, and will keep building our research infrastructure. Painful cuts will have to be made to many non-academic areas, but we will absolutely not allow them to endanger the work of our faculty or the academic success of our students, which are, after all, the reasons we exist.
We are clearly living in difficult fiscal times, but it is not a permanent condition. By wisely managing the challenges we face today, we ensure that we will be the same strong, vibrant and highly successful University tomorrow.
DMHAS spokesman Jim Siemianowski released the following statement:
“Connecticut, like many other states continues to face budgetary problems resulting from the slow pace of the economic recovery. This has resulted in approximately 7.7 million being cut from DMHAS’ FY 13 budget. Most of the accounts that are affected by the rescissions were cut by approximately 5 percent. The Department has just begun to evaluate the specific cuts, the exact impact, and the manner in which they will be implemented.
“The largest cuts were in the area of grant funding for mental health and substance abuse services. The Department will now begin working within our agency and with our providers in order to ensure that critical services are available and the essential needs of our clients are met. The current fiscal environment dictates that we must live within our means.”