Conn. governor signs $40.1 billion budget into law

SUSAN HAIGH - Associated Press
Connecticut Gov. Dannel P. Malloy signs a two-year $40.1 billion budget bill into law at the Capitol in Hartford, Conn., Wednesday, May 4, 2011.  (AP Photo/Jessica Hill)
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Connecticut Gov. Dannel P. Malloy signs a two-year $40.1 billion budget bill into law at the Capitol in Hartford, Conn., Wednesday, May 4, 2011.

Now that Gov. Dannel P. Malloy has signed a two-year $40.1 billion Democratic budget deal into law, attention focuses on a $2 billion gap he still hopes to fill with savings from Connecticut's state employees.

Malloy said Wednesday that his administration continues to meet behind closed doors with "our fellow state employees," trying to resolve "remaining issues" and come up with a plan for saving $2 billion over two years. In the meantime, Malloy's chief budget officer met with state agency heads and human resources officers at Rentchler Field on Wednesday to discuss the process of issuing layoff notices. There are about 45,000 state employees.

Malloy said the administration is looking at more than 4,000 layoffs. Given the various layoff notification requirements, some workers could receive pink slips effective July 1 as soon as Friday.

"I have not sought to demonize anyone in this process. I think it's one of the reasons we're still having those discussions," said Malloy, the state's first Democratic governor in 20 years. "I'm not in a position to guarantee success at this point or at any point, but I have made it quite clear that is the framework that we prefer."

The budget, which received final legislative approval late Tuesday night by Democrats in the House of Representatives, calls for the $2 billion in labor savings and about $1 billion in spending reductions and efficiencies over two years, as well as $1.4 billion in tax increases in the first year and $1.2 billion in tax increases in the second year — on everything from personal income to facials.

Connecticut is facing a $3.3 billion deficit in the new fiscal year, which begins July 1.

Larry Dorman, spokesman for the State Employees Bargaining Agent Coalition, the group that represents 13 state employee unions, said the leaders are still working with Malloy's administration to find "mutually agreeable and fair solutions" to rejuvenate the state's economy.

"But it's not fair or realistic to expect middle-class people who happen to work for the state to each cut $22,000 a year from our family annual budgets," Dorman said in a written statement. "Especially when we, like all middle class families, are already paying 10 percent of our income in state and local taxes, while millionaires are only paying 5 percent of their income and some of our largest corporations are paying little or no taxes at all."

Democratic leaders, who surrounded Malloy as he signed the budget bill in the ornate Old Judiciary Room at the state Capitol, said they're optimistic Malloy will be able to reach a deal with the unions — many of whom backed the former Stamford mayor during last year's gubernatorial election.

Senate President Donald Williams, D-Brooklyn, said he was pulling for Malloy to summon his inner Mariano Rivera to close out the talks soon, referring to the New York Yankees' famed relief pitcher.

The Democrats applauded as Malloy signed the bill, marking the earliest budget deal in recent memory. Just hours earlier, House Republicans had urged lawmakers to wait before passing the budget plan, wanting to see whether Malloy will be able to secure the $2 billion in labor savings. If a deal isn't reached, Malloy has until May 31 to present the General Assembly with a plan for covering the gap in the two-year budget.