Legislators Grant Governor Additional Rescission Powers
By Atty Melanie Dykas, Shea Law Inc.
Early on Friday morning, the House & Senate passed HB 6701 which increases the Governor rescission for the FY12-13 biennial budget. The bill gives the Governor authority to rescind up to 10% of any line item in the budgets for either FY12 or FY13, but the increased authority only applies if those rescissions are made between July 1, 2011 and September 30, 2011. Under the bill, as under existing law, the governor may cut appropriations for municipal aid only with legislative approval. In addition, the bill does not change the process for, or the governor's authority over, legislative and judicial branch budget rescissions. To make rescissions under the bill, the governor must determine that (1) there is either a fiscal exigency related to the budget or there are not enough estimated resources to fund all appropriations and (2) his statutory rescission authority will not be enough to deal with the exigency or shortfall.
If, on or after October 1, 2011, the Governor wants to make rescissions to either the FY12 or FY13 budgets, he will be limited to the 5% per-line-item authority that the Governor has traditionally had. The bill requires the Governor to submit, by July 15th, a plan to the Senate President and House Speaker detailing his proposed rescissions. Leaders can then refer the plan to the Appropriations Committee to hold public hearings by August 15th. The General Assembly may then call itself back into Special Session by August 31st and make changes to the plan, although the ultimate amount of reductions of any substitute spending modifications must equal the amount of reductions proposed by the Governor.
The bill gives the governor additional authority, from July 1 and September 30, 2011, to transfer funds between specific appropriations within a budgeted agency without Finance Advisory Committee (FAC) approval. It increases the maximum amount he may transfer on his own authority from the lesser of $ 50,000 or 10% of any specific appropriation in any one year, to the greater $ 250,000 or 10% of any specific appropriation in a single year. The governor may make such transfers only at the agency's request and when the appropriation to which the funds are transferred is insufficient to meet required expenses for FY 12 and FY 13. The bill also allows OPM to reduce appropriations for higher education constituent unit operating funds to achieve the budget savings and employee reductions the bill requires.
The bill also includes language that extends the deadline from June 30, 2011 to August 31, 2011 for the General Assembly to approve the tentative agreement with the State Employee Bargaining Agent Coalition (SEBAC) while keeping the same procedural steps for the approval. If the SEBAC agreement is approved by August 31st, the Governor's increased rescission authority is repealed on the date of said approval. Under the bill and the act, if the General Assembly does not call itself into session within five days of the contract being filed with the clerks of each house the agreement is deemed approved by the General Assembly as of the date it was filed.
Applying Terms Comparable to SEBAC to Nonunionized State Employees : PA 11-61 required the Administrative Services commissioner and the Office of Policy and Management (OPM) secretary, once the General Assembly approves the contract, to apply terms comparable to the SEBAC contract to all nonunion classified and unclassified officers and state employees. The bill gives OPM, the chief court administrator, and the legislative management executive director until September 30, rather than June 30, to submit plans to the Appropriations Committee detailing how the terms of the SEBAC contract will apply to nonunion classified and unclassified officers and employees in the executive branch, judicial branch, and legislative management, respectively.
Longevity Pay for Executive Branch and Higher Education Employees: PA 11-61 required the executive branch and Board of Regents of Higher Education, by August 1, 2011, to implement changes to longevity pay for nonunion classified and unclassified officers and employees that are comparable to SEBAC longevity provisions. The bill requires changes to the longevity payments for these employees, but does not require it be comparable to SEBAC. Instead it requires longevity to be comparable to the eligibility provisions of the executive longevity pay plan. The executive longevity pay plan is set by the Department of Administrative Services. It specifies the change to longevity only takes place if the SEBAC agreement is approved.
This bill extends the deadline to implement these changes to October 1, 2011.
Wages and Longevity Pay for Judicial and Legislative Branch Employees: PA 11-61 required the judicial and legislative branches, by August 1, 2011, to consider and implement changes to longevity pay and wages for nonunionized officers and employees of the judicial and legislative branches that are comparable to the longevity pay and wage provisions of the SEBAC contract. The bill requires changes to the longevity for these employees to be contingent upon approval of the SEBAC agreement, but does not require it be comparable to SEBAC. Instead it requires longevity to be comparable to the eligibility provisions of the executive longevity pay plan.
This bill extends the deadline to implement these changes to October 1, 2011.
PA 11-61 and the bill specify that nothing regarding the judicial branch wage provisions apply to officers or employees whose wages are set in statute. Judges, family support magistrates, workers' compensation commissioners, and others' wages are set in statute.
Earlier this week Governor Malloy outlined the amount of savings he wants from each state agency in a one-page proposal. Because HB 6701 does not grant the Governor authority to cut municipal aid by $54 million in each of the next two fiscal years, the Governor has said that there may be approximately 1,000 more layoffs beyond the 5,466 announced earlier this week.
HB 6701 included language that reduces the State Earned Income Tax to 25%, down from 30%. This results in savings of approximately $18.4 million in FY12 and $19.4 million in FY13.
Language that would have suspended the state’s ban on privatization was not included in the final bill that passed.
The Senate also considered a bill, SB 1301, that (after adopting a strike-all amendment) would have made changes to state employee longevity pay and the wages used to determine pension benefits. The bill passed the Senate by a vote of 30-6, but was not called for a vote by the House.