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Gov. M. Jodi Rell recently announced that steadily declining tax revenues and an increasing budget deficit will result in the State of Connecticut continuing cost saving practices and finding new ways to save money.

The state previously issued a government hiring freeze, among other orders. Rell directed the state budget office to immediately provide her with a list of administrative actions that can be undertaken to reduce the deficit.

“The State of Connecticut is simply running out of cash, and with two months remaining in this fiscal year, we are also running out of time,” Rell said in a press release. “With no deficit mitigation plan on the horizon from the Legislature, it is up to me to make the difficult choices to find any and all savings in this administration.

“Borrowing our way out of this is fiscally unwise," Rell continued. We must address the spending side, something lawmakers have artfully avoided for months now. The citizens of Connecticut are practicing fiscal prudence in their homes during this recession and they expect the same of their government.”

During the past several months, Rell has ordered:

• five rounds of rescissions totaling $178 million
• three deficit mitigation plans totaling $1.10 billion
• unpaid leave of executive managers saving $1.1 million
• a hiring freeze and out-of-state travel ban

It was recently estimated by the Office of Policy and Management that Connecticut is facing a $667 million deficit, reflecting the recent infusion of more than $380 million in federal stimulus funds and a steady decline in tax collection.

On March 20, OPM’s deficit estimate of at least $667 million not only reflected the recent infusion of more than $380 million in federal stimulus funds, but a steady decline in tax collection.

“Since that estimate was delivered, the daily deposits received by the Department of Revenue Services during the critical month of April have continued to show a grave weakness,” Rell wrote in a letter today to OPM Secretary Robert Genuario.

“Although the Legislature has not yet completed its work on the third deficit mitigation plan – most notably, reporting on its review of unappropriated or ‘off-budget’ accounts – I have offered suggestions for a fourth mitigation plan. To date, the General Assembly has not taken any action on those suggestions.”

Rell has requested that OPM complete its analysis by April 16 and include actions that will provide savings during the current fiscal year, as well as during fiscal year 2010 and 2011.

“The urgency of this fiscal crisis cannot be overstated.” Rell added. “I am deeply concerned that the General Assembly has still not completed its work on a mitigation bill that requires it to identify $220 million in savings from off-budget accounts. While the statutory deadline for that has come and gone, our financial problems have not.”

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