Wednesday, June 29, 2011

Malloy Has Other Options

As of now, the Governor's entire plan is to tell his department heads to save $700 million. The legislature is supposed to OK that plan. He says he has to act now (he doesn't) and that it's his only alternative (it isn't).

Jon Pelto asks why lay-off so many - renegotiate with the unions or at least implement the "savings" agreed upon, even if they have no basis in reality:

The Concession Plan was scheduled to save Connecticut $700 million next year.

That means a “hole” of $700 million.

One option would be to fix the concession plan and get it adopted. 57% of state employees already voted for it but that would require a commitment to the fundamental principles of collective bargaining.

So back to the problem at hand. Although the wage and pension portion of the Malloy/SEBAC agreement can’t be implemented (at least not until there is a re-vote), the plan included $170 million in “savings” that both sides agreed to that can and should be implemented.

Governor Malloy and his budget director agreed that the state could save $90 million in FY12 “by reducing agency procurement costs, making operations more efficient and identifying other cost-saving measures throughout state government”. In addition, separate of the new proposed wellness and disease management programs, the two sides agreed that a health cost containment committee would save $40 million in FY12 and $35 million in FY13.

And finally, they agreed that by using new technologies and reducing the use of outside consultants that state could save another $40 million in FY12 and $50 million in FY13.

Are all of these savings truly achievable? Maybe not, but these savings were good enough a couple of weeks ago for Malloy to include in his plan for next year’s budget. (Oh and they were good enough for the editorial writers who are now calling for massive layoffs).

So why did Malloy throw them out now? He is the one who says he is committed to making government more efficient.

The $700 million would drop to $530 million.

In addition, there is at least $150 million surplus built into next year’s budget with revenues continuing to grow and up to another $100 million hidden in the line item that pays retiree health benefits.

Those would bring the shortfall down even further – to $280 million or even less.

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