State deficit: Clinger asks agencies to prepare for another 2 percent cut

In the wake of Thursday's announcement the budget deficit has grown at least another $60 million, Director of Administration Andrew Clinger has ordered agencies to submit plans for another 2 percent reduction in their budgets.

Those reductions would apply to the fiscal year beginning July 1.

The 2 percent cut would reduce total general fund spending by $64.2 million, neatly covering the latest projections.

But, Clinger said, he doesn't believe that will force layoffs of state workers.

"Based on a conference call (Thursday), most directors felt they could make the 2 percent without any layoffs," he said.

He said there were some questions raised over whether agencies which went beyond the minimum cuts required in the original 4.5 percent reductions could get that extra amount credited against the new round of cuts. Among those which did so are the Department of Corrections and the Legislative Counsel Bureau.

Clinger said they cannot because those extra cuts are already on the existing list of budget reductions.

"If it's on that list, you don't get credit for it," he said. "These will all be new cuts."

The memorandum to agencies makes that point as well: "Agencies may not duplicate any reductions that were included in the 4.5 percent budget reserve process."

He said the agencies have been asked to submit their proposals by June 20.

The additional $60 million raises the total budget shortfall for this budget cycle to $973.7 million.

And a large portion of that shortfall will carry forward to the next budget cycle since nearly all of the first round of cuts - 4.5 percent across the board - was accomplished by eliminating one-shot expenditures such as capital construction projects. Clinger has estimated agencies will need to reduce operating expenditures for the next biennium by more than $400 million each year to get down to the money available.