With key state revenue numbers falling dramatically, Gov. M. Jodi Rell Monday ordered more budget cuts for this fiscal year. As expected, the estimates due for January 15th are very ugly:

• Income tax receipts are off 22 percent from last year;
• Corporate taxes are off 30 percent;
• Sales taxes are off 3.5 percent.

There is no getting around the fact anymore that the Connecticut fiscal house is ablaze but the Governor seems to be the only one with a hose and fire axe. The Governor issued a release today about her actions:

“I have ordered a sweeping review of all existing state contracts,” Governor Rell said. “If the service being provided is not essential, it will be terminated. If it is essential, we will seek to negotiate givebacks in the contract. During these tough fiscal times, government must focus on programs that help people. All but the most essential expenses can wait.”

Rell said if “cancelling contracts will help save jobs or help protect programs for our most vulnerable citizens, then state government can live without magazine subscriptions, without new athletic equipment at certain facilities and without having our office windows washed for six months,” the Governor said. “ Connecticut families have already given up their subscriptions and gym memberships and are now delaying or deferring purchases on all but the most essential items – the State can do the same.”

The Legislature is scheduled to meet and vote on the Governor’s mitigation plan Wednesday.

Governor Rell announced that a team comprised of staff from the Department of Administrative Services Procurement Division and Office of Policy and Management officials will conduct a review of contracts by state agency, quasi-public agency and higher education constituent units. The goal of this review is to sharply curtail the dollar value of these contracts – in many cases, by terminating them altogether, in other cases by seeking to renegotiate the rates paid by the state or by terminating the existing agreement and rebidding the contract.

“With the accelerating fall-off in state revenues, it is even more imperative that we cut state government costs immediately,” Governor Rell said. “The budget deficit for FY 2009 is projected to significantly increase after the January 15 quarterly filing date. States across the country are being battered by declining revenues and the aftershocks of the Wall Street meltdown continue to show their effects in Connecticut .

“I have already taken wide-ranging actions to reduce the cost of state government, but it is clear that more action will be needed,” the Governor said. “We must keep pace with the continuing erosion of our revenues. Accordingly, I am also ordering a review of all Deputy Commissioner positions and other executive appointments and I will develop a force reduction plan. Before we cut programs, we must cut bureaucracy.”

The DAS/OPM review team is to report back to the Governor within 10 days on potential cost savings. Examples of spending on goods and services that will be eliminated altogether include all subscriptions; window cleaning and landscaping services; promotional items such as hats, calendars, magnets and other giveaways; athletic, exercise and recreational equipment; and other non-essential purchases. The state will seek lower rates for such goods and services as architectural and other professional services; certain health care services; and office supplies.