Governor Rell Delivers Third

Deficit Mitigation Plan to Legislature

‘Stop Treading Water in Sea of Red Ink,’ Governor

Says in Offering $1.1 Billion Plan

Read the Plan

            Governor M. Jodi Rell today delivered a $1.1 billion deficit mitigation plan to the General Assembly, her third such plan since November. This plan – which includes her fourth round of cuts in state agency spending – calls for new and deeper cuts in spending and speeding up the implementation of cost-cutting measures scheduled to take effect in the next fiscal year and increased labor cost savings. The Governor’s plan once again avoids using layoffs or tax increases to close the current state budget deficit.

            Depending on the source of the estimate, the shortfall for the budget year that ends June 30 ranges from about $922 million to $1.3 billion. Governor Rell’s budget office estimates the deficit for the current fiscal year at $921.7 million. The Office of the State Comptroller puts the deficit at about $1.1 billion. The Legislature’s Office of Fiscal Analysis estimates the deficit at about $1.3 billion. As a compromise, Governor Rell developed a plan that meets the Comptroller’s number, halfway between the numbers from her budget office and those of the Legislature.

            Because of the steadily worsening national and state economies, all deficit estimates are moving targets and are outdated almost as soon as they are released. The Governor noted that OPM is scheduled to provide the Comptroller its latest monthly estimate of the current year shortfall on Friday.

            Governor Rell urged the General Assembly to adopt her deficit mitigation plan in its entirety at its February 25 session, which is supposed to be dedicated to deficit mitigation and passage of a retirement incentive plan.

            “We are drowning in a sea of red ink and so far the majority party in the Legislature has done nothing but tread water,” Governor Rell said. “They need to adopt my plan in its entirety and stop picking and choosing the relatively easy options while putting off the inevitable. The families of Connecticut are growing increasingly impatient – and angry – as they watch legislators inexplicably drag their heels and this process take longer and longer.”

            This is the third deficit mitigation plan – and the fourth round of rescissions – the Governor has made. Of the first two deficit mitigation plans she has submitted to the Legislature, proposing a total of $301.8 million in cuts, the Legislature adopted just $191.6 million, or 63 percent. The Governor has made $211.7 million in cuts on her own.

            “I am again cutting agency budgets on my own authority, as allowed under state law,” Governor Rell said. “I am also continuing to cancel and scale back purchasing under state contracts. But several components of this plan require immediate action by the Legislature if they are going to slow the flow of red ink.

            “My proposal includes a retirement plan that will allow us to reduce the state work force by the start of April, so we can trim payroll costs,” the Governor said. “I am also moving up to April 1 many of the cost-cutting measures I proposed earlier this month in my two-year budget. And I am seeking a total of about $48 million in labor cost savings for the current year from both union and non-union state employees.

            “Connecticut’s employers and Connecticut’s taxpayers deserve to know that their government will respond to these unprecedented economic times with resolve – not with petty partisanship and buck-passing,” Governor Rell said. “They do not want – they cannot afford – they will not accept – higher taxes. That message is loud, clear and unmistakable. What they want is for state government to take the same sensible actions they have taken in their homes and businesses – spending cut, consumption reduced and big-ticket desires deferred. It’s time the Legislature got that message.”

            The Governor’s plan reflects income from the new federal stimulus bill as well as more than $40 million in additional Medicaid funding the state is owed.

            Since last spring, Governor Rell has taken numerous actions to forestall and reduce potential budget shortfalls. In addition to the agency budget cuts, she has implemented a statewide hiring freeze, banned out-of-state travel that is paid for with state funds and directed agency commissioners to bar all but the most essential purchasing.

            She has also canceled or sharply reduced state contracting and directed state agencies to seek price concessions from vendors, reduced the size of the state motor pool and directed agencies to reduce the number of cellular telephone and other wireless service accounts.