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HARTFORD, Conn. (AP) - Connecticut Gov. Dannel P. Malloy says his budget office has developed a "statewide workforce reduction contingency plan" in case the administration can't reach a labor savings deal with state employees.

The Democrat said collective bargaining units were formally notified Thursday about the plan. That step allows the state to begin issuing layoff notices to more than 1,000 individuals in May, if necessary. Malloy says those 1,000 reductions would be "a first step toward resolving" the state's estimated $1.7 billion deficit.

Malloy says informal talks with union officials are "ongoing and constructive" and hopes layoffs ultimately won't be necessary. The two-year budget he unveiled in February relied on $700 million in state employee savings in the first year.

This contingency plan would result in more than $80 million in savings.

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