The State Budget Surplus is in the Eye of the Beholder

By Rep.Vincent Candelora

There is not a lot of activity in the capitol these days.  Despite the lack of activity, the state, is releasing its final budget numbers and many are touting a $450 million surplus.  As beauty is in the eye of the beholder, so is our state surplus.  In order for the state to get to where we are, we used up $1.4 billion of our savings, underpaid the state pension by $100 million, and raised fees on hunting, camping, fishing, corporations and other licenses.  I hardly believe the state has anything to brag about. As Ranking Member of the Finance, Revenue and Bonding Committee, I serve as one of ten voting members on the State Bond Commission.  In good years, I guess it’s not a bad position to be in, serving on a committee that doles out the money for construction projects throughout the state.  In bad times, I’ve come to appreciate “peer pressure” and recently stood as the sole voice against this borrowing. The Governor presides over the State Bond Commission meetings, and she alone controls what items are placed on the agenda for consideration.  The other nine voting members, consisting of four legislators, Attorney General, State Comptroller, State Treasurer, and two executive branch leaders, typically approve the projects.  The state is not in typical times, and I’ve found it exceedingly difficult to continue to support the spending and borrowing at “normal” levels when we are facing record level deficits in the next budget cycle. At the last bond commission meeting, I, therefore, stood up to the borrowing and respectfully voted against all of the projects on the agenda.  It was difficult to break protocol and vote against borrowing another $520 million earmarked to pay for capital projects, including the high speed rail improvements. Based upon documents from the State Treasurer’s office, however, it was clear this newly borrowed money will also go to pay ongoing basic state expenses or the state risks going broke.  According to State Treasurer Denise Nappier unless the Bond Commission authorized the $520 million, Connecticut would have just one week of cash in hand to pay for all bills coming due in the fall.  This is because Connecticut uses a common cash pool to pay for all of its obligations; from day-to-day operating expenses to construction projects they are all funded from one pool of money. As tax revenue has diminished in the last year from 75 percent of the total cash flow pool to now 50 percent, Connecticut’s over reliance on borrowing to pay basic operating bills has become acute to make up the difference in lost tax revenue. The Treasurer has failed to demonstrate how to balance the books in the spring, when our cash flow position will weaken further. The State’s latest surplus claim, therefore, is certainly in the eye of the beholder.  Our surplus comes on the heels of astronomical amounts of borrowing, tax and fee increases, and raiding all of our savings. If I’ve gained a hundred pounds at the beginning of the year, then lose ten pounds by the end of the year, I guess I’m entitled to brag about losing ten pounds, but I’m not being totally honest with myself.  In this case, I believe the state has an obligation to honest with the public and tell the whole story. Candelora represents North Branford, East Haven and Wallingford in the General Assembly.