Connecticut budget chief orders hiring freeze as income tax receipts drop
HARTFORD >> Office of Policy and Management Secretary Ben Barnes is not sugarcoating a $450 million drop in income tax receipts.
“It’s bad news,” Barnes said Thursday in a phone interview.
To put it in perspective, $450 million is more than the $235 million the state currently has in its Rainy Day Fund, which means the administration and lawmakers will have to take extreme measures such as pushing some of the deficit into next year, which will grow the current $1.7 billion deficit, or borrow to cover the shortfall.
In the meantime, Barnes has ordered a hiring freeze and asked agency commissioners to stop contracting for any services.
All of this is being done before Monday when budget analysts will convene to agree on just how far revenues will deteriorate.
“It would have been unreasonable for us not to identify the elephant in the room,” Barnes said.
In a letter to state agency heads, Barnes wrote that the administration needs to “take actions to prepare for layoffs that may be necessary in the event we cannot reach either a new labor agreement or a balanced budget.”
The budget for next fiscal year assumes Barnes will find $700 million in labor savings. If he’s unable to deliver then it would be necessary to layoff about 4,200 state employees.
Barnes said the administration will do whatever they can to reduce spending.