HARTFORD — Gov. Dannel P. Malloy, citing the recent plunges in the stock markets, will cut $102 million from the current year’s state budget.
“This is all in response to the volatility on Wall Street,” Malloy said, adding that two weeks ago he asked his budget office to run some projections on the volatility of investments, which had been estimated to bring the state about $3.7 billion in revenue. “We’re at risk to not get all the revenue that we otherwise thought we could.”
With the Dow Jones market index down by more than 700 points, he said, he decided to scale back on the revenue estimates in the budget. The reductions will not result in layoffs, Malloy said.
The cuts includes $99.2 million in executive branch agencies. The governor has asked the legislative and judicial branches to reduce spending by $420,000 and $3.1 million respectively, half a percent of their appropriations. The administration will also cut $15 million in municipal aid, a reduction that was previously announced.
The governor has the power to shrink the operating budgets of executive-branch agencies by as much as 5 percent, but can only suggest cuts in the judicial and legislative branches where cooperation may not be forthcoming.
Speaker of the House Brendan Sharkey said he is “disappointed and certainly opposed” to the cuts.
“So these renewed cuts will very likely impact the delivery of health care services,” Sharkey, D-Hamden, said in a statement. “Though the governor has the authority to make these cuts at this time, the Legislature will continue to monitor the status of the budget, and look to mitigate these cuts next session.”
What Malloy is eliminating
Cuts to the 2015-16 budget include:
University of Connecticut $2,397,269
University of Connecticut Health Center $1,389,849
Office of Early Childhood $560,074
Senate Minority Leader Len Fasano, R-North Haven said the cuts don’t bode well for the rest of the fiscal year.
“This is already a disaster, and we are only three months into the budget year,” Fasano said. “What does Gov. Malloy expect to do every month — make painful cuts to social services, to children’s programs and to hospitals? He calls that a strategy?”
Malloy said that it makes sense to order cuts early in the fiscal year, when they can have a lasting effect, but that didn’t ease the outcry from social service groups or municipal leaders.
“Gov. Malloy's plan to cut $4.7 million from substance abuse and mental health programs, and more than $5 million from programs for people with developmental disabilities will be a devastating blow to thousands of individuals and families receiving vital community-based services,” said Jeffrey Walter, Interim CEO of Connecticut Community Providers Association.
The Connecticut Conference of Municipalities issued this statement: “These cuts, while included in the state budget, still represent a breach in the state-local funding arrangement in the middle of the fiscal year, after local budgets have been set, and would adversely affect some of our neediest communities.”
During the 2014-15 fiscal year that ended last June 30, Malloy ordered three rounds of cuts between last November and April that totaled about $100 million.
When the last budget year ended June 30, the deficit stood at about $116 million, but as the year-end revenue totals became clearer, state Comptroller Kevin Lemboreported last month that the red ink had fallen to about $71 million. It will be covered later in the year by a transfer from the state’s half-billion-dollar reserves called the Rainy Day Fund.