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Report: CT reduced its debt by 7.4% over past year

Gov. Ned Lamont at a press conference outside the Capitol in October 2020. (Mark Pazniokas, CTMirror.org)

Connecticut still faces a huge pile of debt, but over the past year alone, it’s wiped out more than $7 billion out of a $95 billion problem — a 7.4% drop — and more debt is expected to come off the books soon.

Gov. Ned Lamont’s budget office reported $88.3 billion in long-term unfunded liabilities last week in its annual Fiscal Accountability Report, an omnibus review of state fiscal trends to help the legislature’s budget-writing panels prepare for the upcoming General Assembly session.

And that report doesn’t take into account a $3 billion supplemental payment made earlier this fall against debt in the state employee pension system. The next actuarial valuation, which will include that payment, is due in December.

“Gov. Lamont has placed Connecticut in a strong position to continue to pay down legacy debt, while preventing tax hikes and significant spending cuts in the event of an economic downturn,” said Office of Policy and Management Secretary Jeffrey Beckham, the governor’s budget director.

While the $2.85 billion surplus OPM forecasts for the current fiscal year — potentially the second-largest in state history — could accelerate debt reduction even further next fall, Beckham tempered his optimism with caution.

“There are global signals of economic softening beginning to take place,” he added. “We will continue to maintain our current fiscally responsible spending and conservative revenue estimates as we closely monitor the impact of changes in the economy.”

Connecticut made strides in its latest report shaving down all major areas of debt.

Pension debt likely is not done shrinking

Unfunded pension obligations, the single-largest area at $39.5 billion, were down $1.3 billion or 3% from last year’s Fiscal Accountability Report.

And while more than 4,400 state employee retirements between January and June — double the amount seen in a typical year — will try to push pension debt upward, Beckham said he’s optimistic that trend won’t be enough to fully reverse the $3 billion supplemental payment made into the state employees’ pension fund this fall.

In other words, debt in this area will drop again when the December valuation comes out. It just remains to be seen by how much.

2 comments

Evan Spears November 23, 2022 at 10:52 am

So are we going to use this money to help the rise in homeless? CT had the biggest rise in homelessness over the course of Ned’s leadership.

Tyrannical COVID lockdown policies while MAYBE good intentioned at first ended up having a massive social and financial cost, we arent going to talk about that?

Just keep voting Blue until we become the so progressive and destitute Portland Oregon where homeless and druggies lumber around every local park. Or how about the very progressive and wonderful place that is NYC where you get assaulted trying to take the train to work?

Keep voting Blue! Yay!

Bryan Meek November 23, 2022 at 10:57 am

The pensions are still funded less than 60 cents on the dollar.

No mention of the $44 billion in covid 19 relief that landed on CT and how much of that went to cook the books here?

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