According to the latest report from State Treasurer Denise Nappier, Connecticut may soon have to open a line of credit just to meet its basic obligations, said Deputy House Republican Leader Vincent Candelora, who is calling once again for change in the state’s fiscal policy.
“There can’t be any more plain evidence that Connecticut continues to spend far more than it takes in from revenue than the Treasurer’s acknowledgement of this situation in her report,” said Rep. Candelora. “However, when we bring attention to the precarious position this puts state finances in, we are dismissed with the accusation that we are playing politics. The administration claims everything is fine. Well, no it isn’t, and this proves it.”
This week Candelora joined House Republican Leader Larry Cafero in a letter to the treasurer, again asking her to appear before a joint hearing of the Appropriations and Finance, Revenue and Bonding committees to explain the root causes of the state’s shaky fiscal status.
Nappier this week released the latest cash flow numbers showing that despite the massive tax hikes enacted just nine months ago, Connecticut’s cash pool is being depleted. She noted, “the common cash pool is trending downward over time and the need for temporary transfers or other resources is growing.’’ She offered a graphic detailing the poor performance of the cash flow.
Nappier acknowledged that those ‘other resources’ include taking out notes to pay bills or establishing a line of credit. Candelora said he believes this sets the stage for yet another tax increase following the November elections.
Republicans first sounded the alarm in December of 2011 when the state’s available cash fell below zero, prompting temporary transfers from bond funds. This practice continued each month thereafter through May of this year. At the end of last month the state’s available cash had shrunk to $121 million compared to the $895 million on hand exactly a year before.
In March Nappier criticized Republicans for saying the state was using borrowed funds to pay for operating expenses and called their statements and newspaper opinion pieces “misleading.’’ She added, “Either the legislators who wrote the opinion pieces do not understand the nuances of how we manage the state’s cash, or they chose to purposely mislead the general public for political ends.’’
Candelora said the treasurer and state legislators have turned a blind eye the state’s worsening fiscal conditions until now and he expects the Malloy administration to announce sometime this summer that money will be borrowed to cover operating expenses.
Rep. Vincent Candelora represents the 86th General Assembly District covering North Branford, Wallingford and East Haven.