Malloy predicts budget process will "take a long time" - WFSB 3 Connecticut

Malloy predicts budget process will "take a long time"

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The governor predicts state budget process will "take a long time." (WFSB File photo) The governor predicts state budget process will "take a long time." (WFSB File photo)

Gov. Dannel P. Malloy says he expects it will "take a long time" until a final agreement is reached on a new two-year budget that addresses Connecticut's latest deficit woes.

The Democrat said Friday he understands the difficulties the legislature is facing but notes: "It's time for everyone to step up."

"We haven't done much hiring," Malloy said. "We won't be doing much hiring."

The governor has ordered an immediate hiring freeze.

The new fiscal year that begins July 1 is projected to be approximate $1.7 billion in deficit. But that figure could worsen after new revenue projections are released Monday. Malloy's budget office has warned that personal income tax revenue collections have fallen short of estimates.

Malloy has invited legislative leaders to meet with him early next week to begin budget talks. He is predicting the negotiation process could go into "extra innings."  

The Office of Policy and Management said it was clear that the state's revenue shortfall could exceed the resources in the budget revenue fund of $235 million. It said it is required to produce a consensus revenue forecast based on April tax receipts on May 1.

Secretary Ben Barnes sent a letter to Executive Branch agency heads on Thursday. Barnes said the state needed to take action to prepare for layoffs if a new labor agreement or balanced budget can't be reached.

He also said hiring restrictions like abolishing vacant positions, not granting requests to refill positions and doing away with automatically refilling positions were implemented.

Barnes also said each agency needed to review its spending.

"Your efforts should include potential savings in all areas of spending, including hiring and overtime, contractual services and purchased commodities," he wrote. "While the most immediate needs are in the state’s General and Special Transportation funds, I am also asking agencies funded through other appropriated funds to economize as much as possible." 

On Thursday, Republicans unveiled their budget. It called for some long term reforms such as legislative approval on all union contracts and a constructional spending cap.  

Both the GOP and the governor are looking for 700 million in labor savings.

"We are significantly off as much as 30 percent off for April and we are facing a serious deficit for the year,” Department of Revenue Services Commissioner Kevin Sullivan said.

The downward trend in income tax collections is blamed on an aging population and lower paying jobs after the recession.  Economists said Connecticut took a big hit.

"Other states don't have to same concentration of finance, so the financial industry in Connecticut was obviously battered by the recession,” Sarah Crane with Moody's Analytics said. “So already it had a strike against it in its recovery."

The session adjourns June 7.

Copyright 2016 WFSB (Meredith Corporation). The Associated Press contributed to this report. All rights reserved.