The Shumlin administration has decided not to unilaterally cut $6.7 million from the current fiscal year’s budget. The rescissions instead will be included in the governor’s budget adjustment proposal to the Legislature in January.
The cuts are part of a $17 million “savings” package that Secretary of Administration Jeb Spaulding previewed for the legislative Joint Fiscal Committee on Nov. 12.
Committee members were not convinced.
They shared Spaulding’s sense of urgency to keep planned spending in line with actual revenues, but they sought legal advice from the Legislative Council as to whether the administration could take such action.
In a draft memo drafted Nov. 24, Legislative Council attorney Rebecca Wasserman said the rescissions already approved by the Joint Fiscal Committee in August preclude the administration from making unilateral cuts now.
Jim Reardon, commissioner of the Department of Finance and Management, said Tuesday the administration still believes it holds the legal authority to make limited cuts. He and Spaulding cite an opinion by Assistant Attorney General Bill Griffin upholding their interpretation of the law.
“We do believe we have the authority based on the consultation with the AG’s office,” Reardon said. “But for the sake of working with the Legislature, we decided we will propose all of the budget adjustments in January.”
Spaulding said the administration agreed to wait on rescissions, but will “slow down” spending in the meantime.
“(G)etting into a fight with the Legislature on this would be counterproductive,” he said in an email.
Reardon said the decision reflects a willingness to work closely with the Legislature.
“I hope the Legislature, when they get the budget adjustment act, will respond promptly,” Reardon said. He said due to the nature of newly identified savings measures, the one-month delay will not result in deeper cuts in state spending.
Departments still are expected to propose cuts totaling $17 million for budget adjustment. They also are directed to slow nonessential spending as the law permits. This could include not filling vacant positions, restricting overtime and travel expenses and delaying some contracts or grants, Spaulding and Reardon said.
Spaulding said no agencies or departments were left out of the directive, although some areas of spending were spared. Areas that are off limits include the General Fund transfer to the Education Fund, debt service, pension fund contributions and higher education.
The next round of cutbacks, which follow a $31 million cut in August, were drafted in response to lower than expected revenues this summer and fall: Four months into Fiscal Year 2015, the state’s General Fund is about $12 million short of projections.
In addition to $6.7 million of rescissions, Spaulding said an additional $5.3 million would be proposed through the budget adjustment process. He said higher than anticipated health care costs for state employees, totaling $3.5 million, would have to be absorbed by departments. Another $1.5 million in undefined savings was already accounted for in the FY15 budget.
Rep. Martha Heath, D-Westford and chair of the Joint Fiscal Committee, could not be reached for comment.
