Menumenu

Deficit plan restores some state money — for now

By Ken Borsuk

 GREENWICH — Officials at Greenwich-based Abilis, who feared the worst as Hartford moved to close a gaping budget deficit for the remainder of the fiscal year, are breathing a bit easier after legislators this week passed a bipartisan deficit mitigation package that likely preserves most of their funding.

Greenwich Hospital also saw a restoration of reimbursements that had seemed destined for the budget ax.

Democratic and Republican lawmakers on Tuesday approved a plan to close the $220 million deficit remaining in the current fiscal year. It restores more than $31 million that Gov. Dannel P. Malloy had sought to cut from hospitals and social service agencies.

The legislators’ plan would instead spread that cut among budgets for state departments.

“We dodged a bullet here, that much we know,” said Abilis President and CEO Dennis Perry.

Abilis was to lose some of its state funding as a result of a $17 million cut to budget for the state Department of Developmental Services. The mitigation package passed this week reduced the cut to the department to $3.4 million.

“What we don’t know yet is how the $3.4 million cut will be applied,” Perry said. “I’ve read it won’t impact the day programs and I’ve read it won’t impact employment, but if it will impact our residential program is still unclear to me.”

The nonprofit Abilis helps people with developmental disabilities.

At Greenwich Hospital, restoration of the funding means $740,000 in reimbursements it had been promised by the state will again be coming its way, officials said. But hospital president Norman Roth said concerns remain.

“While this is helpful, we are still paying $18.6 million in taxes, which puts us at an effective tax rate of 65 percent,” he said. “We will continue to do all we can to reduce costs without impacting patient care. In 2017, we will face further revenue gaps which will make our next fiscal year even more difficult.

Greenwich’s legislative delegation to Hartford saw the package as a victory, but said big challenges lay ahead. A projected budget deficit of $900 million has been forecast for the 2016-17 fiscal year, which begins July 1. Republicans warn it could be even higher.

“While the deficit mitigation plan we passed did not address the long-term structural deficits, we were able to minimize the impact on social service programs,” said state Rep. Fred Camillo, R-Greenwich. “Services to the developmentally disabled and mentally ill will continue to be provided with no interruptions. Layoffs may be needed, but we are hopeful they are held to a minimum.

“Despite this momentary success, we will be right back in this position after the new fiscal year begins,” he continued, “as there is a projected deficit of $4.5 billion over the next (two-year) term.”

Perry, at Abilis, said they don’t have much time to enjoy the reprieve granted this week.

“The $900 million is the elephant in the room,” he said. “That issue has to be dealt with, but the encouraging part is that you saw Democrats and Republicans working together on this. Hopefully the bipartisan approach to spread the cuts around will be the approach that’s taken instead of the targeted and very onerous approach that that governor took in his initial cuts. Hopefully this will set a precedent.”

State Sen. L. Scott Frantz, R-Greenwich, was not as optimistic. He said headlines calling the deal bipartisan weren’t telling the whole story.

“The headline is that Republicans joined with Democrats, but really it was the exact opposite,” Frantz said. “The Democrats joined the Republicans. It was our plans that were adopted here. The Democrats were the ones who finally decided to do what needed to be done.”

He said the deficit problem continues to get worse and Assembly Democrats are not taking the necessary steps to address it by reducing spending.

“If we keep going at this pace then soon we are going to find ourselves in a position where we are out of options,” Frantz said, adding that Malloy has started to show he “gets it” through his recent proposals to curtail spending.

Malloy’s budget for next year includes thousands of layoffs.

“This is about the reality that Connecticut state government, to accommodate the new economic reality, is going to have to be smaller than it is today,” Malloy told reporters Tuesday. “We’re going to have to take the steps needed to align our expenditure level with our revenue level.”

“We’re working to address our long-term obligations,” Senate Majority Leader Bob Duff, D-Norwalk, said Tuesday.

State Rep. Livvy Floren, R-Greenwich, was more optimistic than her Greenwich colleague.

“We are hopeful that the Democrats will allow spending reductions made in December and yesterday to roll out to next year,” Floren said Wednesday. “That would give us a fighting chance to get some of the much needed structural policy changes in areas like pensions, medical plans and personnel head count to be debated and put in place.”

Perry said he needs to have direction from the state about how Abilis will be impacted by the $3.4 million cut and a sense of where things are headed with the next year’s deficit.

“Most anything can be dealt with if you have enough time to plan,” Perry said. “The cuts that we don’t get notice about and hear about at the last minute are where the real challenges are.”

Perry said he would continue to work with the legislators to keep as much of the state funding as possible.

“We will keep applying the pressure,” he said. “The budget mitigation might mean that this cut now will not be as bad as we had feared but the worst thing we could do is take our eye off the ball because the next cut could end up being even worse than we had feared.”

GREENWICH — Officials at Greenwich-based Abilis, who feared the worst as Hartford moved to close a gaping budget deficit for the remainder of the fiscal year, are breathing a bit easier after legislators this week passed a bipartisan deficit mitigation package that likely preserves most of their funding.

Greenwich Hospital also saw a restoration of reimbursements that had seemed destined for the budget ax.

Democratic and Republican lawmakers on Tuesday approved a plan to close the $220 million deficit remaining in the current fiscal year. It restores more than $31 million that Gov. Dannel P. Malloy had sought to cut from hospitals and social service agencies.

The legislators’ plan would instead spread that cut among budgets for state departments.

“We dodged a bullet here, that much we know,” said Abilis President and CEO Dennis Perry.

Abilis was to lose some of its state funding as a result of a $17 million cut to budget for the state Department of Developmental Services. The mitigation package passed this week reduced the cut to the department to $3.4 million.

“What we don’t know yet is how the $3.4 million cut will be applied,” Perry said. “I’ve read it won’t impact the day programs and I’ve read it won’t impact employment, but if it will impact our residential program is still unclear to me.”

The nonprofit Abilis helps people with developmental disabilities.

At Greenwich Hospital, restoration of the funding means $740,000 in reimbursements it had been promised by the state will again be coming its way, officials said. But hospital president Norman Roth said concerns remain.

“While this is helpful, we are still paying $18.6 million in taxes, which puts us at an effective tax rate of 65 percent,” he said. “We will continue to do all we can to reduce costs without impacting patient care. In 2017, we will face further revenue gaps which will make our next fiscal year even more difficult.”

Greenwich’s legislative delegation to Hartford saw the package as a victory, but said big challenges lay ahead. A projected budget deficit of $900 million has been forecast for the 2016-17 fiscal year, which begins July 1. Republicans warn it could be even higher.

“While the deficit mitigation plan we passed did not address the long-term structural deficits, we were able to minimize the impact on social service programs,” said state Rep. Fred Camillo, R-Greenwich. “Services to the developmentally disabled and mentally ill will continue to be provided with no interruptions. Layoffs may be needed, but we are hopeful they are held to a minimum.

“Despite this momentary success, we will be right back in this position after the new fiscal year begins,” he continued, “as there is a projected deficit of $4.5 billion over the next (two-year) term.”

Perry, at Abilis, said they don’t have much time to enjoy the reprieve granted this week.

“The $900 million is the elephant in the room,” he said. “That issue has to be dealt with, but the encouraging part is that you saw Democrats and Republicans working together on this. Hopefully the bipartisan approach to spread the cuts around will be the approach that’s taken instead of the targeted and very onerous approach that that governor took in his initial cuts. Hopefully this will set a precedent.”

State Sen. L. Scott Frantz, R-Greenwich, was not as optimistic. He said headlines calling the deal bipartisan weren’t telling the whole story.

“The headline is that Republicans joined with Democrats, but really it was the exact opposite,” Frantz said. “The Democrats joined the Republicans. It was our plans that were adopted here. The Democrats were the ones who finally decided to do what needed to be done.”

He said the deficit problem continues to get worse and Assembly Democrats are not taking the necessary steps to address it by reducing spending.

“If we keep going at this pace then soon we are going to find ourselves in a position where we are out of options,” Frantz said, adding that Malloy has started to show he “gets it” through his recent proposals to curtail spending.

Malloy’s budget for next year includes thousands of layoffs.

“This is about the reality that Connecticut state government, to accommodate the new economic reality, is going to have to be smaller than it is today,” Malloy told reporters Tuesday. “We’re going to have to take the steps needed to align our expenditure level with our revenue level.”

“We’re working to address our long-term obligations,” Senate Majority Leader Bob Duff, D-Norwalk, said Tuesday.

State Rep. Livvy Floren, R-Greenwich, was more optimistic than her Greenwich colleague.

“We are hopeful that the Democrats will allow spending reductions made in December and yesterday to roll out to next year,” Floren said Wednesday. “That would give us a fighting chance to get some of the much needed structural policy changes in areas like pensions, medical plans and personnel head count to be debated and put in place.”

Perry said he needs to have direction from the state about how Abilis will be impacted by the $3.4 million cut and a sense of where things are headed with the next year’s deficit.

“Most anything can be dealt with if you have enough time to plan,” Perry said. “The cuts that we don’t get notice about and hear about at the last minute are where the real challenges are.”

Perry said he would continue to work with the legislators to keep as much of the state funding as possible.

“We will keep applying the pressure,” he said. “The budget mitigation might mean that this cut now will not be as bad as we had feared but the worst thing we could do is take our eye off the ball because the next cut could end up being even worse than we had feared.”