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Shumlin aims at saving $12M

January 9, 2011
NEAL P. GOSWAMI
Posted: 01/07/2011 11:04:27 PM EST
Gov. Peter Shumlin AP

Friday January 7, 2011BENNINGTON — Gov. Peter Shumlin used his first full day in office Friday to announce a cost-savings plan he said will trim at least $12 million from the state’s budget, without imposing layoffs or pay cuts to state employees.

Shumlin, a Democrat, was sworn into office Thursday afternoon. On Friday, he set forth on addressing a 2012 fiscal year budget deficit that could reach $150 million.

The plan calls for an immediate hiring freeze across state government. Department requests to fill vacant positions must be cleared through Secretary of Administration Jeb Spaulding, Shumlin said.

Without layoffs

“Closing the projected $150 budget gap in the next fiscal year and bringing Vermont’s budget into a long-term sustainable balance will require further streamlining in state government,” Shumlin said. “I am determined to do this without further layoffs of employees or across the board pay cuts with no compensating offset.”

Only half of the current job vacancies, or those created through attrition, will be filled, creating up to $5 million in savings, he said. The state work force can be distributed across government agencies appropriately to ensure effective services, Shumlin said.

“The administration has the ability to re-allocate vacancies across state government and we will use this authority to fill positions where most needed, while achieving savings through management and technology efficiencies

and adjusting agency and departmental budgets accordingly,” he said.Additionally, Shumlin said he and Spaulding are working with the Vermont State Employees Association and lawmakers to gain concessions from the union and implement other cost-cutting measures. He said the goal is to carry out:

* A voluntary reduced work week for state employees

* Savings in the health insurance plans for active and retired state employees

* Savings in state employee retirement plans

* Reductions in personal services contracts

Some state workers could opt for a shorter work week with management approval. Doing so would not diminish the quality of services, Shumlin said. Employees who accept a shorter work week would not lose health benefits. The plan could save at least $2 million in the general fund, he said.

Another $2 million can be saved from the state employees’ retirement plan through “benefit recalibration.” It will require some reduction in benefits and an increase in contributions, Shumlin said.

Shumlin said he will also seek a 2 percent savings from the state’s personal services contracts. He said contracts for outside services have grown from 727 contracts costing $110 million in 2003 to 1,570 contracts costing $237 million in 2009.

VSEA President Robert Hooper said the union is working closely with the administration to find savings. A meeting took place shortly after Shumlin was sworn in on Thursday to discuss the plan, he said.

Hooper said the state’s annual required contribution to the employee retirement fund has increased during the recession because of major loss in the stock market. The union is looking at ways to “help reduce that contribution since we have such a big deficit,” he said.

“I think the employees will be able and interested to provide some type of assistance,” Hooper said. “A temporary fix is very worthy of consideration. How long a temporary fix is required is going to be a different conversation.”

State employees are willing to looking into health care savings, too, Hooper said. But higher premiums for workers is not an expected outcome, he said.

“At this point the discussion is to sit down for plan redesign. We’re not talking about premium shift. If we did, that would be a bargaining issue,” Hooper said.

The union endorsed Shumlin during the gubernatorial campaign. Now, Hooper said the Shumlin administration, although just a day old, has already managed to bring state employees into the cost-saving discussion in a collaborative way.

“Bottom line is we’re willing to talk about anything. It’s a welcome change from the Douglas administration where we were usually the last to know what was happening,” he said. “It’s not a concession, it’s a collaboration. It’s a great thing and we didn’t get the opportunity to do this during the Douglas administration.”

Contact Neal P. Goswami at ngoswami@benningtonbanner.com

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