Cuts will fall most heavily on Medicaid payments, social services departments, and aid to towns and cities.
Connecticut’s new budget is just three months old, but the Malloy administration has just announced that it must make emergency spending cuts.
In making $103 million worth of cuts to this fiscal year’s budget, Governor Dannel Malloy said he's responding to the broader economy. “What concerns me the most is the international situation and the volatility in the stock market. That's what keeps me up at night,” he said.
Connecticut is unusually vulnerable to the movements of the stock market because of its heavy reliance on tax receipts from income tied to investments, like capital gains and dividends. Malloy’s budget chief, Ben Barnes, said not responding proactively to the current poor market conditions would be reckless.
The budget cuts will fall most heavily on Medicaid payments, on social services departments, and on aid to towns and cities.
The almost $64 million in cuts to Medicaid reimbursements will likely also mean that hospitals and other health care providers will miss out on additional federal funds.
"It’s outrageous that the governor would slash Medicaid funding that’s desperately needed to care for the most vulnerable people in our state," said Jennifer Jackson, CEO of the Connecticut Hospital Association. "It puts a tremendous additional strain on healthcare providers, who already provide services with reimbursement that is nowhere near the actual cost of delivering that care."
Towns and cities will see the implementation of $15 million cut to non-education aid from the state; the budget agreed in June had left a provision for up to a $20 million cut in the event it was needed. The Connecticut Conference of Municipalities said:
“These cuts, while included in the state budget, still represent a breach in the state-local funding arrangement in the middle of the fiscal year, after local budgets have been set, and would adversely affect some of our neediest communities."
The legislature, which just a few months ago went through a protracted fight with the administration over the budget, has not reacted positively to the announcement.
Speaker Brendan Sharkey issued a statement, below:
I’m disappointed and certainly opposed to what appear to be cuts targeting some of the very areas we sought to protect in the budget. Under our budget agreement, the bipartisan MORE Commission was charged with identifying additional municipal savings, and they haven’t been given the opportunity to do so yet. We also agreed to restore hospital funding the governor proposed to cut, and so these renewed cuts will very likely impact the delivery of health care services... The legislature will continue to monitor the status of the budget, and will look to mitigate the cuts next session.
Republicans in the legislature don’t want to wait that long — they’ve issued a call for a special session next week, calling the cuts a “disaster.”
