State Treasurer Denise Nappier has sent a letter to Governor Jodi Rell cautioning her that the declining national economy may leave the state with a cash flow problem later in the year.
The Governor says it remains uncertain if there will be a problem but says her office is doing everything possible to make sure Connecticut meets its financial obligations.
“Our state keeps its money in a common cash pool, in part so that we can earn as much interest as possible – the same way a family might keep most of its money in a savings account,” Governor Rell said. “The downside of that practice is that when the economy is slow we do not always have a large amount of ready cash."
The Governor's office says revenue from personal income tax, business tax and sales tax have fallen recently and has negatively affected cash flow into the state coffers but say deficit mitigation measures and money from the federal stimulus package will help.
