Sen. Kane Suspects Gov. Malloy Is Using Accounting Gimmickry (Waterbury Republican-American)

November 21, 2014

Spending cut $48 million
Gov. Malloy looks to close budget gap

HARTFORD — Gov. Dannel P. Malloy is ordering nearly $48 million in spending cuts to executive branch agencies to reduce a projected deficit of nearly $100 million in this year’s $19 billion state budget.

The reductions ranged from a $4 cut to an account in the governor’s Office of Policy and Management to a nearly $6.3 million cut in the Department of Children and Families.

Malloy is also asking the legislature to reduce $865,000 in spending and the judicial branch to slash $6 million to help bridge the gap because constitutionally he cannot cut their budgets.

There was no immediate response from the Democratic leaders of the House and Senate to Malloy’s cuts, but top Republican lawmakers said the Democratic administration is continuing to fail to recognize the true severity of the state’s budget problems.

The administration’s cuts address half of the projected deficit, said Sen. Robert J. Kane, R-Watertown, a ranking Senate Republican on the Appropriations Committee.

The Malloy administration is now projecting a $99.5 million shortfall, while the legislature’s Office of Analysis is now projecting an $89.1 million deficit.

“You are only tackling half the problem. You’re relying on more hopes and dreams that things are going to turn around and you’re going to be able cover yourself at some later point,” Kane said. “We are not dealing with the structural issues that are taking place. We’re dealing with the here and now.”

Republican leaders are also questioning if Malloy is understating the budget problem. Kane said the Office of Fiscal Analysis has identified potential gaps in a number of agency budgets that approached $90 million that are not reflected in its deficit estimate.

If this year’s shortfall reaches 1 percent of the nearly $17.5 billion general fund, then state law requires Malloy to submit a plan to lawmakers to deal with it. However, the legislature is not obligated to take action.

The general fund is the largest of the nine appropriated funds that make up the state budget. It finances the majority of state operations.

Kane said he suspects the administration is using accounting gimmickry to avoid triggering the statutory threshold that would require Malloy to submit a deficit reduction package.

State law gives governors limited authority to reduce state spending in executive branch agencies without the legislature’s approval. In budgeting parlance, the reductions are called rescissions.

“These rescissions are painful for some, but tough decisions are necessary to keep the state on firm fiscal footing,” said Benjamin Barnes, the governor’s budget director.

Malloy ordered reductions in personnel and fringe benefits accounts totaling $15.5 million. These savings represent nearly one-third of the overall cuts to executive branch agencies.

The cuts to personal service accounts in 26 agency budgets top $11.1 million. There is also nearly $4.8 million in savings from fringe benefits. Malloy also cut $1.5 million from the reserve for salary adjustments.

Cuts to higher education total more than $6.4 million.

The state’s four regional universities, 20 community colleges and the online Charter Oak State College were targeted for cuts totaling $2.7 million. The University of Connecticut is taking a $2.3 million hit, and the UConn Health Center is losing nearly $1.4 million.

Malloy is cutting $9.2 million from the Department of Children and Families. This is the most being slashed from any agency budget.

The largest single cut reduces nearly $6.3 million for residential placements for children in DCF care. This reduction caused bipartisan concern.

“I definitely have concerns about the $6 million cut for board and care for children under DCF care,” said Sen. Beth Bye, D-West Hartford, co-chair of the Finance, Revenue and Bonding Committee. “I need to better understand what that looks like, exactly, because I don’t want anything to negatively impact our care for adolescents who have mental health and behavioral challenges.”

Kane said the cut will cause more problems for cash-strapped private providers that DCF pays to provide services to families and children in need.