Governor Rell, Citing Diminished Revenues,

Orders New Cost Cutting Measures

 State Contracts for Goods and Services to be Cancelled or Reduced;

Deputy Commissioner Positions to be Phased Out

            With the most recent year-to-date state revenue collections down steeply from last year, Governor M. Jodi Rell today announced additional measures to reduce government costs during the rest of Fiscal Year 2009, including the cancellation of state contracts for certain goods and services and the elimination of some Deputy Commissioner positions within state government.

            Governor Rell said that based on actual collections by the Department of Revenue Services, income tax estimated payments that are due January 15 are currently running 22 percent below the same period last year. Meanwhile, corporation tax estimated payments that were due December 15 fell 30 percent compared to last year and sales tax collections to date are down by 3.5 percent compared to a similar period last fiscal year.

            “I have ordered a sweeping review of all existing state contracts,” Governor Rell said.  “If the service being provided is not essential, it will be terminated. If it is essential, we will seek to negotiate givebacks in the contract.  During these tough fiscal times, government must focus on programs that help people.  All but the most essential expenses can wait.”

“If cancelling contracts will help save jobs or help protect programs for our most vulnerable citizens, then state government can live without magazine subscriptions, without new athletic equipment at certain facilities and without having our office windows washed for six months,” the Governor said.  “Connecticut families have already given up their subscriptions and gym memberships and are now delaying or deferring purchases on all but the most essential items – the State can do the same.”

            “Lawmakers are scheduled to meet on Wednesday to consider my second budget deficit mitigation plan,” Governor Rell said. “Yet we already know the steps I outlined less than one month ago will not be enough to stem the tide of red ink because the state budget deficit is growing daily.”

            Governor Rell announced that a “SWAT” team comprised of staff from the Department of Administrative Services Procurement Division and Office of Policy and Management officials will conduct a review of contracts by state agency, quasi-public agency and higher education constituent units. The goal of this review is to sharply curtail the dollar value of these contracts – in many cases, by terminating them altogether, in other cases by seeking to renegotiate the rates paid by the state or by terminating the existing agreement and rebidding the contract.

            “With the accelerating fall-off in state revenues, it is even more imperative that we cut state government costs immediately,” Governor Rell said. “The budget deficit for FY 2009 is projected to significantly increase after the January 15 quarterly filing date. States across the country are being battered by declining revenues and the aftershocks of the Wall Street meltdown continue to show their effects in Connecticut.

            “I have already taken wide-ranging actions to reduce the cost of state government, but it is clear that more action will be needed,” the Governor said. “We must keep pace with the continuing erosion of our revenues. Accordingly, I am also ordering a review of all Deputy Commissioner positions and other executive appointments and I will develop a force reduction plan. Before we cut programs, we must cut bureaucracy.”

            The DAS/OPM review team is to report back to the Governor within 10 days on potential cost savings. Examples of spending on goods and services that will be eliminated altogether include all subscriptions; window cleaning and landscaping services; promotional items such as hats, calendars, magnets and other giveaways; athletic, exercise and recreational equipment; and other non-essential purchases. The state will seek lower rates for such goods and services as architectural and other professional services; certain health care services; and office supplies.