Democratic Gov. Dannel P. Malloy on Tuesday offered up an untraditional, second state budget proposal that tries to fix next fiscal year's worsening deficit problem by cutting more spending, requiring non-union workers and elected officials to pay more for their health care and eliminating 2,500 state jobs through layoffs, retirements, attrition and hiring freezes.
Malloy said his revised $19.7 billion plan is the only budget proposal on the table that covers the entire projected $922 million deficit in the fiscal year that begins July 1.
Democratic legislators last week forwarded tax and spending proposals based on a $570 million deficit projected back in January. It's the same figure Malloy used for his original budget proposal, which he presented in February.
"This is the only budget presented thus far that tackles the full scope of the challenge," said Malloy, adding how his proposal does not increase taxes.
It's questionable whether Malloy's entire revised budget will become reality. House Speaker Brendan Sharkey, D-Hamden, said rank-and-file lawmakers have problems with many aspects of it, ranging from his decision to greatly scale back a Democratic proposal that uses some sales tax money to reduce local property taxes to cutting funds to hospitals and changing local education grant formulas.
"We appreciate the fact the governor produced a budget, but obviously it's not anywhere near what I think would get votes on either side of the aisle in the House. It's up to us at this point to prepare a budget adjustment before the end of the session for the governor to sign," he said, adding how, "the legislature produces budgets. The governor signs them."
As Malloy released his revised budget plan, his administration continued to issue layoff notices to state employees.
The Office of Policy and Management confirmed 71 union- and non-union workers received layoff notices on Tuesday. That figure includes 43 employees at the Department of Social Services, 24 at the Department of Mental Health and Addiction Services and four at the Department of Economic and Community Development. The employees were relieved of their duties at the end of day and will continue to be paid their salaries and state benefits throughout their contract notice period, which is about four to six weeks depending on the union.
The state already issued 165 notices on Monday. Hundreds more are expected in the coming days.
The administration, however, has not provided a number of expected layoffs, saying it's still trying to determine how many workers may retire. Malloy said he expects the layoffs will spark additional retirements.
The president of the Connecticut AFL-CIO, Lori Pelletier, questioned Malloy's determination to lay off state employees. When asked why union leaders haven't agreed to Malloy's requests to return to the bargaining table and negotiate potential labor concessions, she said the state should first take a closer look at eliminating various tax exemptions and tax credit programs for businesses.
"We're giving away $4 billion a year in tax expenditures that we don't look at," she said. "Why aren't we looking at that?"
The president of the Connecticut Business and Industry Association, Joe Brennan, credited Malloy with taking difficult steps to close the entire projected state deficit.
"The sooner we can get these things behind us, the sooner we can start growing again," he said.
The legislature's Office of Fiscal Analysis had projected next fiscal year's deficit to be as much as $933 million. But Malloy's budget director, Ben Barnes, said that was reduced to $922 million because of a recently discovered error made in calculating the property tax credit on thousands of state income tax returns. Those taxpayers are now on the hook to cover the $12 million in underpayments.