To reverse an impending state budget deficit, Gov. Dannel P. Malloy’s administration has told agencies it will order emergency spending cuts and freeze all-but-critical hiring.

The move prompted concerns Thursday from both private- and public-sector unions that this would stymie Malloy’s big initiative to expand Department of Transportation professional staff and, in turn, to launch more highway, bridge and rail construction work.

In a memo sent late Wednesday to all agency heads, the governor’s budget director, Office of Policy and Management Secretary Benjamin Barnes also reinforced existing caps on overtime work.

Current budget trends, including both shrinking revenues and cost-overruns in various agencies “will ... result in a general fund deficit if management actions are not taken right away,” Barnes wrote.

In a joint report last week, the administration and the legislature’s nonpartisan Office of Fiscal Analysis concluded that revenues supporting this year’s $19 billion state budget are running $59 million below projected levels.

Nonpartisan legislative analysts reported in late October that they were tracking more than $80 million in budget “deficiencies,” or potential cost-overruns, among state agencies. The Malloy administration insisted in late October that this conclusion was premature – a stance that prompted Republican legislators to accuse the Democratic governor of denying budget problems until after Election Day.

Barnes’ Thursday memo states that “my office has been monitoring expenditure trends in a number of agencies that may result in deficiencies” unless corrective agency is taken immediately.

One fiscal fix that Malloy will employ, according to the memo, involves “rescissions” – limited cuts to the adopted budget that the governor can employ without legislative approval.

Existing law gives the state’s chief executive broad discretion to reduce most accounts unilaterally by up to 5 percent whenever “the governor determines that due to a change in circumstances since the budget was adopted certain reductions should be made.”

Municipal aid cannot be reduced, though, without legislative approval.

And other spending areas, such as debt payments and unionized employees’ salaries and benefits, effectively are excluded from deep rescissions because of contractual obligations.

Malloy ordered emergency cuts on multiple occasions during his first term to mitigate budget deficits.

And while he also routinely has opted not to fill budgeted positions to wipe out red ink during his first term, the latest hiring restrictions could prove the most controversial.

During the most recent race for governor, Malloy frequently shielded himself from attacks that transportation projects have progressed slowly on his watch by noting this year’s budget adds 103 full-time positions to the Department of Transportation – an agency both private-sector construction trades and state employee unions have argued is badly understaffed.

Those 103 new positions in the budget include 66 engineering posts, which are vital to the DOT’s capacity to launch new projects in prompt fashion.

“We have already begun to hire more engineers,” Malloy spokesman Andrew Doba said Thursday. “The governor has made unprecedented investments in transportation since taking office, and that’s not going to change.”

But does that mean the DOT will get to fill all positions in the budget?

According to the last monthly statewide personnel report, issued on Nov. 1, the DOT had 2,970 full-time employees – 112 fewer than it had when the last state budget closed on June 30.

“We want the hiring,” said Ben Phillips, spokesman for CSEA-SEIU Local 2001, which represents engineers and other professional transportation staff. “They are understaffed.”

Phillips added the union was pleased to see Barnes’ directive to agencies to curtail use of private consulting contracts. But that approach only works if the state workforce is adequate, Phillips said.

“We’ve got to be vigilant and make sure state agencies are properly staffed,” added Larry Dorman, spokesman for the one of the largest state employee unions, Council 4 of the American Federation of State, County and Municipal Employees.

Similar concerns were voiced by the private-sector construction trades, which rely on DOT projects for work.

The industry appreciates the governor’s efforts to invest in transportation, said Don Shubert, president of the Connecticut Construction Industries Association, adding it is critical both to fill existing DOT positions as well as the new ones in the current budget.

“The industry’s concern is ConnDOT’s ability to maximize those investments,” Shubert said.

kphaneuf@ctmirror.org

Keith M. Phaneuf is a reporter for The Connecticut Mirror (www.ctmirror.org). Copyright 2014 © The Connecticut Mirror.