Rep. Candelora: Connecticut’s Going Broke, Stop Borrowing

Candelora Opposes More Debt Authorization Rep. Candelora: Connecticut’s Going Broke, Stop Borrowing

Facing an unprecedented cash flow crisis, Rep. Vincent J. Candelora, of East Haven, North Branford and Wallingford, today railed against more borrowing by the state Bond Commission to pay for daily government operations, including state employee salaries and expenses, casting a spotlight on just how precarious state’s finances have become. See a video with Candelora's remarks after the meeting. Candelora is the Ranking Member of the Finance, Revenue and Bonding Committee, which makes him an automatic member of the Bond Commission. Candelora said, “We cannot continue to borrow hundreds of million of dollars for operating expenses and claim that it will pay for large capital projects when the reality is that may not be the case.’’ Rep. Lawrence Cafero of Norwalk and the House Minority Leader added, “With the state’s deteriorating financial health, it should be clear that Connecticut is getting in even deeper over its head. We are borrowing on the backs of future taxpayers.’’ Candelora broke with protocol and voted against borrowing another $520 million that is technically earmarked to pay for capital projects, including high speed rail improvements. Based on documents released today, however, it is clear that the newly borrowed money will also have to pay ongoing state expenses or the state risks going broke. According to State Treasurer Denise Nappier unless the Bond Commission authorization of $520 million goes through, Connecticut would have just one week of cash in hand to pay for all bills coming due. Connecticut uses a Common Cash pool to pay for all of its obligations, from day-to-day operating expenses to construction projects. As tax revenue has diminished in the last year from 75 percent of the overall pool to now 50 percent, Connecticut’s over reliance on borrowing just to pay the bills has become acute. “I cannot support using the state Bond Commission as an ATM to fund every day government expenses. Dedicated bond funds should be used for bridges, highways, rails and schools, not to balance the state budget that is saddled with programs we cannot afford,’’ Candelora said. “You cannot tell taxpayers this huge sum of money will pay for rail improvements – or anything else - when you know that is obviously not the case.’’ Candelora voted against authorizing any new borrowing because he said it was clear to him that the use of the $700 million the state borrowed a year ago for “cash flow’’ issues was directed at individual short term projects instead. Candelora said Connecticut will close its books this year with a cash account that is 60 percent less than last year. If revenues from all sources; from taxes, fees and federal resources; plummet the state could find itself without enough money to pay its bills. “Ignoring the problem will not make it go away,’’ he said.