What’s Your Share of Connecticut’s Debt?
Connecticut taxpayers’ share of the state’s debt jumped 8% last year to $53,400 according to a new report released this week.
Truth in Accounting’s annual Financial State of the States report says Connecticut has $12.1 billion in available assets and $81.9 billion in bills—including bond debt and unfunded state employee pension and retirement benefits.
“Financial decisions made by the state’s elected officials over the years have left Connecticut with a $69.8 billion shortfall, which equates to $53,400 for every taxpayer,” the Chicago-based nonpartisan, nonprofit organization said.
“Most of the state’s overall debt comes from protected pension benefits and retiree healthcare costs.
“Of the $85.6 billion of retirement benefits promised, the state has not funded $34.8 billion of pension benefits and $20.9 billion of retiree healthcare benefits.”
TIA gave Connecticut’s finances an ‘F’ grade in the report, noting that individual taxpayer share of the state’s debt has soared 30% over the past nine years.
“Connecticut’s financial condition is not only concerning, but also misleading as government officials have failed to disclose significant amounts of retirement debt on the state’s balance sheet,” the report said.
“As a result, residents and taxpayers have been presented with an inaccurate and untruthful accounting of the state government’s finances.”
Echoes Fiscal Commission Report
TIA’s findings echo the stark analysis shared by the state Commission on Fiscal Stability and Economic Growth in a comprehensive report presented to lawmakers earlier this year.
That report directly connects Connecticut’s fiscal instability to its economic struggles—an economy that’s contracted in four of the past five years and failed to recover all jobs lost in the 2008-2010 recession.
“State government’s fiscal instability is itself a root cause of our poor economic growth because it leads to a lack of confidence by the business community and among state residents,” the commission’s report said.
“Reigniting economic growth requires Connecticut to regain fiscal stability. The commission’s recommendations offer a road map for legislative action starting this session.
“The time to act is now.”
While lawmakers failed to act on the commission’s recommendations, the legislature did approve further studies of state tax policy, revenue and expense optimization, and Teachers’ Retirement System reforms.
CBIA president and CEO Joe Brennan said he’s hopeful those studies will “prepare the 2019 General Assembly to take the difficult but necessary steps to tackle the state’s fiscal challenges.”
“The commission’s report showed in stark terms how the state’s recurring deficits and unfunded long-term liabilities are suppressing economic growth,” he said.
EXPLORE BY CATEGORY
Stay Connected with CBIA News Digests
The latest news and information delivered directly to your inbox.