Connecticut is flush with cash to the tune of $4 billion in surplus. So now what?
CT Mirror reporter Keith Phaneuf has been digging into the budget data for decades and he understands the political decisions and how they impact how our tax dollars are spent.
Mike Hydeck: "So have we ever had a surplus like this? Or is this historic?"
Keith Phaneuf: "Nothing, nothing even close. I mean, we are looking at, in this fiscal year alone, more money in one year than the maximum rainy day fund allowed by law. I mean, we have $3.1 billion in our reserves. It took us four years to build that up. And we thought, wow, that's massive. We're right now on pace to close June 30 with $4 billion more in black ink. That's 20% of the entire budget, Mike."
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Mike Hydeck: "That is unbelievable. All right, so the rules enacted back in, I think it was 2017, correct me if I'm wrong. That bipartisan budget, they set up a system so we can pay down our long term debt. So when the rainy day fund hits, I think it's 15% of our budget, that excess money goes down to paying the long-term debt. Do all these parameters actually have to be reconfigured now because we have so much cash?"
Keith Phaneuf: "No, you raise a really good point though Mike, that's really important. We're now going to just take a minute and make $4 billion seem small. We have $95 billion as a state in long-term debt if you count our pension debt, our retirement health care program debt, our bonded debt. On a per capita basis, we top just about every state in the nation except Illinois. We still have a tough road to hoe over the next 20 to 30 years, which is why when we do have windfalls like what we're looking at this year, we're supposed to basically save that money. That said, everybody, I want to be clear, every proposal out there wants to effectively use some of this money. Governor Lamont wants to use some of this money to cover the raises and bonuses for state employees that the house approved yesterday. So we do have safety valves where the legislature can effectively spend some of this money. One of the fastest ways to spend the money in the rainy day fund is spend it before it gets in there, before this fiscal year is over. They'll take some of this surplus and dedicate it for something else. So it won't be surplus anymore. It'll never make it into the rainy day fund and as you said, then spill over into the pensions. They may in future years start debating the parameters of how much we save. I doubt they'll do it in an election year."
