As Keith Phaneuf of the CT Mirror is reporting in a new investigative piece entitled, Pace of state layoffs slower than planned as one deadline nears, Governor Dannel Malloy’s inability to successfully manage the state budget problems will mean that the budget deficit that is hidden in the coming fiscal year’s spending plan will be significantly larger than previously reported.
The new state budget that begins on July 1, 2016, a plan that was adopted by the Democrats in the Connecticut General Assembly and signed into law by the Governor, not only makes record cuts to public education and a variety of critically important health and human services for Connecticut’s most vulnerable citizens, it is a budget that is actually out of balance by at least $250 million.
Just a few weeks ago, having pronounced the new state budget, Malloy and the Democrats pronounced it balanced, padded themselves on the back for a job well done, and left Hartford behind to focus their attention on this fall’s legislative elections.
However, the harsh reality is that the new state budget not only fails to adequately fund the programs and services that Connecticut citizens need and deserve, but the deficit hidden inside the new budget is so large that Malloy will need to implement record budget reductions on top of the record budget cuts that he and his allies have already adopted, or they will need to return to the Capitol to raise taxes, before or after the November election.
Although the most immediate question is whether Malloy and legislative leaders will even admit that their spending plan is a failure or whether they will try to hide the magnitude of the new budget deficit until after the November elections
As Phaneuf explains;
Gov. Dannel P. Malloy’s efforts to reduce the state’s workforce are progressing more slowly than originally planned — an issue that could worsen a likely deficit this fiscal year and pose a bigger threat to finances after July 1.
As of June 1, 693 Executive Branch workers and 239 in the Judicial Branch have received layoff notices, a total of 932. That’s only about half of the 1,900-to-2,000 layoffs the governor said two months ago that he anticipated being ordered by June 10.
Budget counts on big labor savings
But the fiscal implications of reducing the state workforce — and of not doing so — are huge.
According to the legislature’s nonpartisan Office of Fiscal Analysis, just under 2,000 layoffs would save $133 million per year.
The new $19.76 billion budget Malloy and legislators crafted for 2016-17 cut $255 million from departmental salary accounts and also assumes the administration will find another $69 million in “general employee” savings.
Several legislators, including Sen. Beth Bye, D-West Hartford, co-chair of the Appropriations Committee, conceded this budget assumes more in labor savings than the administration’s layoff plan would provide — even if all layoffs are achieved.
If the labor savings are not in place, the new budget could be out of balance significantly before the fiscal year even begins.
“The new budget could be out of balance significantly before the fiscal year even begins.”
And out of balance it will be…
The effort by Malloy and the legislature’s Democratic leaders to claim that they would reduce the state budget by $324 thanks to state employee layoffs and concessions ($255 million from salary accounts and $69 million from “general employee” savings) was irresponsible and nothing short of a gimmick.
The plan was just another example of how their rhetoric and political spin has been designed to withhold and cover up the truth.
And the truth is that Governor Dannel Malloy has been consistently unable or unwilling to provide Connecticut with a balanced state budget.
In the months leading up to the 2014 gubernatorial election, Malloy famously said – and reiterated on a daily basis – that there was no state budget deficit, nor would there be one if the voters gave him a second term in office.
During his re-election campaign, Malloy also promised that he would never, ever raise taxes again – a true “Read My Lips” moment considering there are even “revenue enhancements” in this year’s failed budget, not to mention the massive shift of costs onto the backs of local property taxpayers that will be required to make up some of the cuts to public schools.
It was only days after the November 2014 election that Malloy and his political operatives finally begin to admit that they were sitting on a sea of red ink.
When the state’s books were actually closed on that year’s budget, the final state budget deficit exceeded $110 million.
This year, even after Malloy and the legislature implemented massive cuts to state services and approved unprecedented numbers of state employee layoffs, the state budget will end up more than $260 million in deficit.
As Phaneuf explains in his CT Mirror story, Connecticut’s Rainy Day fund stood at about $520 million on Election Day 2014 – the day Malloy was given his second term in office by claiming there was no budget deficit, nor would there be one if he was re-elected.
But after the Connecticut Rainy Day Fund was used to cover last year’s deficit and will be used, again, to cover this year’s deficit, the total amount left in the state’s savings account will be in the range of $145 million, far less than the $250 plus million deficit that is already built into this coming year’s budget plan.
It sounds a bit complex, but it isn’t.
The decision to coddle the rich, reduce funding for public schools, undermine the state’s most vital programs, and layoff state employees, while knowingly saddling taxpayers with yet another large budget deficit is unconscionable.
Unfortunately, the question is not whether Connecticut will need to address this continuing fiscal crisis. The only issue is whether Malloy will, once again, try to hide the deficit from the public until after this year’s elections are over.
I suppose the other question is whether the voters will fall for this ploy yet again
There is a reason the phrase, “enough is enough” came into being….
For additional background read the CT Mirror story at: http://ctmirror.org/2016/06/02/pace-of-state-layoffs-slower-than-planned-as-one-deadline-nears/