Warning Signs Everywhere- Fiscal Calamity Ahead! Open the Door and Work Together to Fix this mess!

Hartford, CT – State Senator Toni Boucher (R-Wilton) released the following statement today re: fiscal accountability report submitted to the legislature by the non-partisan Office of Fiscal Accountability and the Governor’s Office of Policy and Management.

“By all accounts Connecticut faces a deficit of approximately $100 million this FY2015 and deficits of nearly $3 billion during the next two years. This will only lead to significant long-term unfunded liabilities on top of the debt the state has already accumulated.

“Earlier this week, Governor Malloy and the bonding commission allocated $266,970,253 in new General Obligation bonds. That pushed the state $167 million over the governor’s self-imposed soft bonding cap of $1.8 billion.

“This irresponsible borrowing during a time of fiscal crisis should give everyone pause. You simply cannot continue to approve projects, no matter how worthy, that you have no capability of repaying.

“Exceeding the cap by millions puts future obligations on backs of Connecticut families and businesses. This not the kind of gift one would bequeath to the future generation.

“As of today the state has approved $6.8 billion in projects but has not funded these projects. Just three years ago the state had $3 billion worth of projects approved for bonding. The rapid pace at which these projects are flying through the process without the state having money to actually pay for them is alarming.

“In 1992, after the state income tax was made law voters demanded a spending cap be put in place to safeguard against irresponsible financial decisions. This administration has now effectively turned its back on that cap.

“In Connecticut, our per-taxpayer debt burden is more than $44,000 and 13% of the state budget is dedicated to paying down debt. The State Treasurer’s letter of Nov. 18 explained that the state cash position had deteriorated to the point that money was transferred from bond proceeds to cover operating expenses. I am extremely disappointed that the practice of borrowing to pay for daily operating expenses and excessive bonding is taking place.

“Fitch credit rating agency this week issued an ‘AA’ rating on $500 million worth of Connecticut general obligation bonds and assigned a negative outlook.

“As it has alluded to in past assessments, Connecticut’s budget vulnerability, reduced fiscal flexibility, relatively high debt, reliance on one-time budget revenues, and other metrics are a recipe for disaster! We need to stop these practices. When you borrow money you still have to pay it back.

“We need comprehensive long term solutions. Leadership needs to work across the aisle and accomplish this goal for the good of the people. If we do not heed the warning signs now, it may be too late to save the state from fiscal calamity.”