Jan. 7, 2011-MONTPELIER -- Gov. Peter Shumlin announced Friday a plan to achieve $12 million in General Fund savings in Fiscal Year 2012 without imposing pay cuts or layoffs of existing state workers.
The administration will implement an immediate hiring freeze across state government. All requests to fill vacant positions will require specific approval of the office of the Secretary of Administration.
In addition, the Governor said Administration Secretary Jeb Spaulding will work with the State Employee unions and the Legislature to enact the following savings beginning July 1:
- A voluntary reduced work week for state employees, allowing them to opt for a shorter work week, subject to management approval, while still ensuring overall departmental quality service levels. Employees would not lose health benefits under the arrangement. A conservative estimate of savings from this step is $2 million in General Funds.
- Savings in the health insurance plans for active and retired state employees intended to save money for both employees and the employer (state government). A conservative estimate of savings from this step is $2 million in General Funds.
- Savings in the state’s cost of supporting retirement plans for employees; savings along the lines of those garnered in the Teachers Retirement System that were passed last year. The savings will likely be a combination of benefit recalibration and contributions. Our estimate of savings from this step is $2 million in General Funds.
- Savings from the state’s personal services contracts of 2 percent. According to the state’s annual workforce report, Personal services contracts have escalated from 727 contracts valued at $110 million in 2003 to 1,570 contracts in 2009 valued at $237 million. By sharpening our pencils and managing those contracts aggressively, the 2 percent savings target will garner $2 million or more.
“Closing the projected $150 million 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,” the Governor said. “I am determined to do this without further layoffs of employees or across the board pay cuts with no compensating offset.”
Gov. Shumlin said he expects at least half of the vacated positions to generate a savings of $4 million to $5 million in the General Fund, with a total savings for the full proposal of about $12 million in Fiscal Year 2012.
“The Administration has the ability to reallocate 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,” Gov. Shumlin said.
The projected total General Fund savings from this package is a minimum of $12 million in General Funds. Total savings from all fund sources will be more than $25 million.
CONTACT: Susan Allen