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No Easy Budget Solution for Our New Leaders

Fiscally Fubar

By Gregory B. Hladky

November 02, 2010

If you closed all the prisons and all facilities for abused and delinquent kids, you’d slash spending by $1.5 billion. And that wouldn’t solve even half of our state budget crisis.

Of course, our new governor isn’t going to do that. But he’s got to solve pain-in-the-ass budget cuts or he’ll never find a way to deal with a deficit that could top $3.3 billion.

The trouble is there are areas of Connecticut’s Budget Land that are untouchable, either by law, court order or because they are so politically radioactive that going near them amounts to career suicide for those in elective office.

You can’t, for example, not pay what you owe on huge amounts borrowed over the years. So $1.67 billion of this year’s budget is completely out of bounds.

“You’re not going to close prisons, you’re not going to get rid of essential personnel, you’re not going to shut down hospitals,” says former New Haven state Rep. William R. Dyson, who spent 16 years as co-chairman of the legislature’s Appropriations Committee.

Lots of Tea Party types would argue that they can find fat for cutting all the way through our $19.1 billion budget and that there’s absolutely no need to go raising taxes or borrowing money to solve this ungodly spending mess.

The trouble comes in finding where to insert your government liposuction nozzle. A popular answer is to put the squeeze on 45,000 unionized state workers. Of course, state unions point out they’ve agreed to a three-year, $700 million concessions deal to help solve the 2009 budget crisis.

OK. We’ll go the layoff route. Well, maybe not the state cops patrolling our highways or the prison guards keeping the convicts in line or the folks taking care of neglected children or the health care workers or the guys inspecting the bridges or the people driving the snow plows.

And we don’t want to spend more time waiting in line at motor vehicles and we don’t want to shut down the state parks, etc., etc. We just need to hit all the rest of the “non-essential” state employees. Except it ain’t that easy.

According to the legislature’s Office of Fiscal Analysis, the average annual state worker salary is $37,500. Fringe benefits bring the state’s cost for each worker up to $52,219. So if you lay off 1,000, that’s an easy $52.2 million. Right?

Wrong. It costs money to lay someone off, including notices, accrued vacation and unemployment benefits. Turns out total “termination expenses” for a state worker are between $11,082 and $15,409. Which means, at best, laying off 1,000 workers would save only about $41.1 million.

If you laid off 10,000 workers, nearly a quarter of the entire workforce, the salary savings would only amount to about $411 million, not all of which would come in the first fiscal year. That wouldn’t come close to solving the mess even if the new governor and legislature agreed to such a politically unpalatable act.

“Not every dollar in the budget is easily cut,” says Jeff Beckham, a spokesman for Rell’s Office of Policy and Management. Dyson estimates that “maybe 10 percent of the budget” is available for cutting, which would amount to less than $2 billion, well short of the projected deficit. “It doesn’t get you where you need to be.”

What’s left? Tax increases and more borrowing: exactly the formula that every governor and legislature in the last 20 years have used to solve big-time deficits. “There is no ‘low-hanging fruit,’” one member of Gov. M. Jodi Rell’s administration says privately. "We’ve already picked all the fruit and cut down the trees."