Fasano: State Leaders Need to Seriously Review CT’s Fiscal Health CT Ranks #47 in New Fiscal Health Study

July 8, 2015

Hartford – A new report from the Mercatus Center at George Mason University highlights Connecticut’s problematic financial health and ranks the state as 47th in the nation for overall fiscal condition. The report shows that in the long run, “Connecticut’s fiscal metrics point to several areas of weakness” and ranks the state’s finances among the worst in the country.

Senate Minority Leader Len Fasano (R-North Haven) released the following statement regarding these findings:

“State leaders have to acknowledge and understand these unfortunate facts so that Connecticut can learn from past mistakes and pursue a better path for our future,” said Sen. Fasano. “The current budget is balanced only on paper. In does nothing to address long-term financial problems that result in repeated poor rankings and deficit after deficit. We need to change course. We need to look at the long-term solutions Republicans proposed in our Blueprint for Prosperity. There are ways we can improve our outlook, but the governor needs to admit there is a problem before he can start to fix it.”

Sen. Fasano referenced the state’s excessive bonding as a contributing factor for the low fiscal health ranking.

  • In total the governor has moved over $1.6 billion worth of operating expenses into bonding, expenses that were previously paid for by the state’s General Fund, not using borrow money.
    “Connecticut is borrowing excessively for operating expenses, swiping the state credit card for daily necessities. And that card is far from getting paid off each month,” said Fasano.
  • Connecticut’s bonded indebtedness increased by $1.9 billion since Gov. Malloy took office.
    “In that time he has also increased the use of General Obligation Bonds by 79%, planning to bond over $2.5 billion this year. That means indebtedness will continue to increase before the governor leaves office,” said Fasano.
  • The General Assembly approved the governor’s plan to underfund debt service by $315.2 million over the next two years.
    “This excessive underfunding does serious damage to an already unstable budget,” said Fasano.

Sen. Fasano also cited problems with retiree pension benefits.

“Connecticut is weighed down by high pension costs as a result of a system in which state employees contribute only 2% to their defined benefit pension plans, significantly less than the national average of 6.17%. Connecticut is also struggling to better manage benefit payments after a recent audit revealed how potentially millions of dollars of disability benefits have been getting paid out to retirees who shouldn’t have received them. The system has serious flaws and continues to add to our negative outlook,” said Fasano.

“Poor fiscal health means more burdens on taxpayers, more painful budgets, and more obstacles that interfere with support for those most in need. We all need to recognize these issues before we can change them.”