With the state facing a projected cost overrun of $59 million, Gov. Dannel Malloy has called for a statewide public hiring freeze in an attempt to improve Connecticut’s finances.
The freeze was announced last week in a memo from Secretary of the Office of Public Management Ben Barnes to the heads of all state agencies. In the memo, Barnes said that estimated revenues for fiscal year 2015 are currently projected to run significantly lower than the budgeted amount. To address the problem, Barnes added that all hiring for non-critical positions will cease, effective immediately. The governor will soon reveal a list of additional spending cuts.
The timing of the freeze — just over a week after the conclusion of a close gubernatorial race — is no coincidence, said Gary Rose, the chairman of the Department of Government and Politics at Sacred Heart University.
“Now that the election is over, it’s obvious that [Malloy] has to deal with the issue,” Rose said, adding that statewide polls suggest that the hiring freeze would be the most popular method of addressing the budget deficit.
Malloy is also preparing for future budget deficits by not dipping into the state’s roughly $400 million rainy day fund, according to Fred Carstensen, the director of the Connecticut Center for Economic Analysis at the University of Connecticut. Carstensen added that Malloy knows he might need the money next year, noting that the deficit for fiscal year 2016 is currently projected at around $1.3 billion.
Joseph McGee, the vice president of public policy and programs at the Business Council of Fairfield County, agreed with Rose and Carstensen, saying that the matter is a simple one: The state is facing a deficit, and Malloy must balance the budget.
But the budget cuts have raised concerns in some quarters, particularly regarding infrastructure investment and the Department of Transportation. Carstensen said that, by restricting infrastructure development, the hiring freeze will hurt Connecticut’s economic competitiveness with other states.
He also said that about $5 billion has been budgeted for the DOT’s capital projects, but a lack of personnel at the DOT has stopped the state from moving ahead with those projects.
Carstensen emphasized the importance of hiring new engineers to allow infrastructure investment to proceed. He noted that because of the dearth of engineers, the state has not yet issued bonds for the project.
“It’d probably cost around $30 million to hire engineers for all 200 open positions,” he said. “That’s nothing. That’s pocket change — a rounding error in a $20 billion state budget.”
McGee, however, partially disagreed with Carstensen on the engineering issue. He said that though infrastructure development should be a primary focus for the state, the hiring freeze is simply too small to have a major effect on Connecticut’s economy.
The freeze may run opposite to the interests of public unions across the state, but Rose noted that these unions were never enormously supportive of Malloy in the first place. He was optimistic, however, that the unions would accept the freeze without significant protest.
“Bureaucratic agencies always want to have larger budgets and more personnel,” he said. “There’ll be some grumbling, but the public employee unions will probably realize that it’s the least painful way. I don’t think it’s going to cause too much of a conflict.”
Connecticut is one of only 14 states where Democrats control the State Senate, State House of Representatives, and Governor’s Office.