June 21, 2010

Piscopo: Downgrade of State Bond Rating No Surprise

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HARTFORD — The state’s credit was downgraded recently by one of the three major rating agencies because the Democratic-controlled legislature’s decision to use one-shot revenues to cover our deficits and borrow its way out of the current financial mess, Rep. John Piscopo said this week. This development has huge implications for Connecticut’s fiscal stability, said Piscopo, who represents Thomaston, Harwinton, Burlington and Litchfield. It is bad enough that now it will cost taxpayers millions more in carrying costs to pay for capital projects such schools, roads and clean water plants because our rating was downgraded from AAA to AA, he said. Most troubling, though, is that Connecticut this year will borrow $956 million to subsidize state employee salaries, pensions and just to keep the lights on in state government.

The downgrade shouldn’t surprise anyone. Last October, the rating agencies “degraded’’ Connecticut’s rating with a “negative outlook’’ because of the excessive borrowing to pay bills in the 2009-10 fiscal year.

Not one Republican voted for the state’s current budget, although Governor Rell chose not to veto the tax and spending plan last September. That budget emptied the Rainy Day Fund and relied on federal stimulus money to further fill the budget holes—billions of dollars that will not be available next year.

Despite the warning last October, legislative Democrats still decided to simply put more of our state’s operating expenses on the credit card this spring – hence the downgrade.

Piscopo joined his Republican colleagues in repeatedly offering detailed, common sense alternative budgets that were rejected by the majority Democrats in Hartford. Those plans were based on smaller government payrolls, shared responsibility for getting rid of the state’s deficits and rolling back spending to 2009 levels. The Republican path required no borrowing to pay for operating expenses or tax increases, he said.

All of the Democratic shell-game budgeting will lead to bigger financial problems, Piscopo said, problems that will have to be confronted by the next legislature and governor. By every estimate the budget deficit for 2011 is expected to be $3.4 billion.

Financial markets do not engage in politics—they only determine whether Connecticut has come forth with an honest way to pay its bills, Piscopo said. Connecticut’s legislature has not measured up.