Connecticut: The Republic of Debt

The 2013 session of the Connecticut General Assembly ended with the adoption of record amounts of additional state borrowing. 

They adopted $750 million in state bonds to pay a portion of the cost associated with moving Connecticut to Generally Acceptable Accounting Principles (GAAP).  Then there was the $1.6 billion for Malloy’s UConn initiative “to overhaul the state’s flagship university over the next decade,” this coming after the state’s $2.3 billion UConn 2000 program.  And then, of course there are hundreds of millions more in bonding for programs and services that should be funded out of the State’s General Fund rather than state borrowing, such as Malloy’s massive corporate welfare program and the state’s Stem Cell Research Program.

The fact is that the FY14-FY15 state budget relies heavily on record borrowing.

And this is occurring in a state that already has record amounts of debt.

Even before this latest bonding spree, the balance on Connecticut’s state credit card was more than $19.3 billion.

Referred to as “bonded indebtedness,” it is the amount of outstanding debt that Connecticut’s taxpayers must pay back, with interest, over the next 20 years.

This amount does not include the taxpayer funds that must also be paid to fund the state’s various unfunded liabilities such as the state and teachers’ pensions, health and other post-employment benefits.  That amount adds another $40 billion plus to the state’s fiscal ledger.

The $19.3 billion is only the existing bonds that must be paid…

When it comes to the level of state debt, no other state in the nation comes close to the level of official indebtedness facing Connecticut and its citizens.

The average per capita debt burden among the 50 states is $1,408.  That is, every man, woman and child in the average state is “on the hook” for $1,408.

In Connecticut, the per capita debt burden is $5,096.

But that’s not all.                                                                               

When it comes to facing the ramifications of the growing debt, Connecticut’s elected officials actually took a giant step backwards this year.

Not only did Malloy and the legislature add record amounts of debt, they ducked debt payments that were supposed to be made during this upcoming budget cycle, thereby pushing the burden until after the next gubernatorial election.

Back in Fiscal Year 2009, Governor Rell and the Democratic-controlled legislature addressed a massive state deficit by approving a series of special, short-term bonds called Economic Recovery Notes.  Each year the state is supposed to be paying off a portion of those notes. 

However, the two year budget just passed by the General Assembly delayed $196 million in Economic Recovery Note payments next year and the year after.  The additional interest cost to Connecticut taxpayers for this “restructuring” will be about $45 million

Ironically, when you strip away all the political spin, that amount is about what Malloy and his administration added to education spending in Connecticut…and the gall to claim it was a “historic” investment in education.

During the last gubernatorial campaign candidate Dan Malloy called these types of budget gimmicks, “kicking the can down the road,” and promised never to do it.

Now Governor Dannel Malloy is making these gimmicks a regular approach to his budget plans.

  • R.L.

    Buy Dan.
    By Dan.
    Bye Dan.

  • jschmidt2

    However this is what the voters wanted since they voted for Malloy and Democrat control. This can’t be blamed on Republicans.

    Let the buyer beware. Be careful what you ask for, you may get it. Don’t bit the hand that feeds you (business). I came, I saw, I conquered(Malloy). Hey I ran out of witticisms.

    Just think of how us Republicans feel. And the latest poll has Dan only 3 points behind Foley. Sounds like with a few extra ballot bags in Bridgeport, Dan can pull it out, again.

    • JMC

      You are correct, JS2. The Dem memes,1) “The Republicans are just as bad”, 2 “They’re all like that (i.e. like these Dems, or in other words, every pol is totally corrupt), and 3) “Yes. but Rowland, Rell, or so-and-so (Pick Republican name) were also bad” are total cop-outs.
      It’s time for people to take responsibility for the havoc their votes have caused. You wanted a Blue legislature, you got one. Just like CA and NY. Why did you think it would be any different here in CT?

      And now the Gimme voters will be crowded to the polls in swarms by their Dem handlers with their little Dem voting guide cards in hand and you can kiss this state and any chance of change or reform goodbye.

  • buygoldandprosper

    Schmidt!
    Stop with the insane partisanship. It might work in a state that is not as dysfunctional as Connecticut but the republican’s here are just as corrupt and guilty of mismanagement. $100 whores pack Hartford but we, the people, seem to be the ones constantly f**ked!
    Stop assigning blame and work on a solution…by voting them all out of office!
    Think California, now virtually a one party state. Granted it is a nation state, and as crazy as can be, but they are turning around to the surprise of all…even those in charge.
    Kick-the-can Dan is bad news. That we can agree on.

  • Sad in Bridgeport

    If I wanted a tax paying corporate welfare union buster I’d vote Republican and lower my taxes.

  • Sleepless in Bridgeport

    The only can we need to “kick down the road” is Danny boys.

  • buygoldandprosper

    All that debt and few ways to pay it down.

    PTR, the gunmaker, will announce their move out of state shortly and more will follow. Dan claims to not care but real jobs are leaving and Dan spends (on credit of course) to pay for THE BEST EFFORTS of companies to ad more jobs. We pay UBS and ESPN for new jobs and they create them AFTER they have massive layoffs! The math does not work no matter how you do it.
    Dan views Nutmeggers as taxpayers first, and voters a close second. It is part of his twisted world view and he needs some quality time in the private sector to see what it is like living under the yoke of an oppressive state government. I doubt that he will move to a horse farm, out of state, like Lowell Weicker did after his reign of terror!

  • mookalaboona

    Malloy is an embarrassment to himself. When is he going to learn….never!

  • buygoldandprosper

    Dan Malloy. Making headlines with his post-Newtown stupidity.

    “PTR’s chief executive officer, Josh Fiorini, says the plant will employ 140 people, many of whom will relocate from Connecticut. The move will take place over three years.

    The average wage of the company is $22 an hour, Fiorini said.”
    Gee. A bit better than the new minimum wage that Dan waffled on.

  • 1987tsd

    I have never known a politician who is as much a liar as this man.

  • msavage

    jschmidt and JMC–really? You guys are still beating the partisan dead pony? Do you read the news (other than mainstream media)? Do you see what’s going on all over the world? Brazil? Turkey? This is not about Republican vs. Dem. Malloy isn’t even BEHAVING like a Dem.–nor a traditional republican, for that matter. This is about a GLOBAL cabal of really, really rich people who have decided that no amount of money/control is enough for them. They want MORE–always MORE, and they are enlisting a group of conscienceless CEO’s, bankers, hedge fund managers and politicians all over the world to help them to accomplish their goals. Malloy is nothing more than a stupid, low-level foot-soldier. He has no ties to traditional Dem. OR Republican values because his orders come from a place of MONEY, not a place of any responsibility to his constituents. He is easily bought-off by promises of fame/money. THAT is his major usefulness in the overall grand scheme–not any intelligence, ability or skills that he might possess. He is happy to help starve the majority of his constituents if it means he gets his own little slice of the money/recognition. At least his payoff could potentially be in the millions. What is really pathetic are the even lower foot-soldiers–Adamowski, Vallas and Occhiogrosso come to mind–who are willing to throw their fellow human beings under the bus for their six-figure salaries. Please get away from the partisan mind-set. We need to be concerned only with finding a new governor who is not a sociopath–who possesses a conscience and a real concern for his fellow human beings. You need to stop thinking in terms of party–parties mean nothing anymore.

  • Striking

    Malloy is a liar. He is amoral and that’s what allows him to literally lie about almost everything, automatically.