Governor Rell: Widening Deficit Requires

Additional and Immediate Reductions in Spending

Governor Directs OPM to Compile

List of Administrative Options

            Governor M. Jodi Rell today announced that because of steadily declining tax revenues and a growing budget deficit for this fiscal year, she has directed her budget office to immediately provide her with a list of administrative actions she can undertake to reduce the deficit.

“The State of Connecticut is simply running out of cash, and with two months remaining in this fiscal year, we are also running out of time,” Governor Rell said. “With no deficit mitigation plan on the horizon from the Legislature, it is up to me to make the difficult choices to find any and all savings in this administration.

“Borrowing our way out of this is fiscally unwise. We must address the spending side, something lawmakers have artfully avoided for months now,” the Governor said. “The citizens of Connecticut are practicing fiscal prudence in their homes during this recession and they expect the same of their government.”

Governor Rell has taken a number of steps over the past several months to mitigate the deficit including:

·        Five rounds of rescissions totaling $178 million

·        Three deficit mitigation plans totaling $1.10 billion

·        Requested unpaid leave executive managers, saving $1.1 million

·        Ordered a hiring freeze and out-of-state travel ban

On March 20, OPM’s deficit estimate of at least $667 million not only reflected the recent infusion of more than $380 million in federal stimulus funds, but a steady decline in tax collection.

“Since that estimate was delivered, the daily deposits received by the Department of Revenue Services during the critical month of April have continued to show a grave weakness,” Governor Rell wrote in her letter today to OPM Secretary Robert Genuario. “Although the Legislature has not yet completed its work on the third deficit mitigation plan – most notably, reporting on its review of unappropriated or ‘off-budget’ accounts – I have offered suggestions for a fourth mitigation plan. To date, the General Assembly has not taken any action on those suggestions.”

The Governor requested OPM complete its analysis no later than Thursday, April 16 and that it includes actions which will provide savings not only in this fiscal year but in FY 2010 and FY 2011.

“The urgency of this fiscal crisis cannot be overstated.” Governor Rell said. “I am deeply concerned that the General Assembly has still not completed its work on a mitigation bill that requires it to identify $220 million in savings from off-budget accounts. While the statutory deadline for that has come and gone, our financial problems have not.”