By Daily Mail (U.S.) | Created at 2024-11-27 19:21:40 | Updated at 2024-11-27 21:51:09
2 hours ago
Connecticut's tax-supported debt as a percentage of its own revenue greatly exceeded all other states for fiscal year 2022.
The revelation comes as a slew of state construction and transportation projects remain tied up.
In total, the state's net tax-supported debt (NTSD) for 2022 was $28.9billion, according to the Office of Legislative Research (OLR) - or $7,988 for each of its residents.
Governor Ned Lamont’s budget spokesman, Chris Collibee, reacted to the number this week - as it was more than three times that of the state with the next-most debt, Hawaii.
Maintaining infrastructure in the far-flung state is notoriously costly, thanks to things like sea-level rise, land-scarcity, and the state's remote nature.
In Connecticut, this is not the case - leading Collibee to offer an explanation.
'We enjoy a high quality of life in this state,' the budget advisor said in response to the nearly $29 billion that's been racked up. 'And that does require continued capital investments for a variety of public facilities and infrastructure.'
He conceded the report still 'illustrates [a] need for continued adherence to sound fiscal management', as officials now work to reduce the debt and, in Collibee's words, '[the] burdens on our taxpayers.'
A Metro-North Railroad train crosses the Walk Bridge in Norwalk while construction on a new bridge continued last week. Such projects have caused Connecticut's tax-supported debt to skyrocket, lawmakers this week confirmed
Connecticut sports the fourth highest property tax rate in the country, behind only New Jersey, Illinois, and New Hampshire.
Those states ranked fourth, eighth, and 26th respectively, with per capita NTSDs of $5,030, $2,903, and $756.
Connecticut's corresponding number is nearly as much as all three combined, OLR's report revealed - months after the state's General Assembly made a major move to eliminate a huge portion of the mounting number.
In May, officials adopted a proposal personally penned by Lamont that saw nearly $500million funneled away from the state's annual budget - specifically, a portion designated for finance upgrades to its aging transportation infrastructure.
The money will instead go toward retiring high-interest-rate bonds ahead of schedule, which Lamont's administration estimates will save the state about $60 million annually by 2026 - and as much as $75 million within the next two years.
The bonds had allowed investors to funnel money into projects to make returns, but Connecticut has been using the tactic - which essentially constitutes borrowing - to make payments on even more borrowing.
This has been going on for decades, and the state is expected to borrow another $80million for the current, once-every-other year budgeting cycle - something the CT Mirror on Wednesday reported was 'akin to using one credit card to pay off another.'
Upon assuming office in 2019, Lamont, a Democrat, challenged legislators to dial back borrowing and accept a 'debt diet' - but those calls, until now, have gone unheard.
In total, the state's net tax-supported debt (NTSD) for 2022 was $28.9billion, according to the Office of Legislative Research (OLR) - or $7,988 for each of its residents. Another languishing bridge project in Stamford is seen here
Governor Ned Lamont’s budget spokesman reacted to the number this week - as it was more than three times that of the state with the next-most debt, Hawaii. The Democrat for years has been asking state officials to lessen their reliance on borrowing money
Pictured, the Connecticut State Capitol in Hartford. Some lawmakers, most of them Democrats, continue to insist that borrowing is essential to the certain parts of the famously affluent state's framework
At the time, he received pushback from Democrats in the state's General Assembly, paving the way for the state to now set to sell some $2.6billion in bonds to Wall Street investors this fiscal year - all to support state initiatives.
This includes a lengthy till for school construction and transportation work, most of which are ongoing highway, bridge and rail projects.
This, in part, is because the state pays a greater share of municipal school construction costs than most other states due to not having a county government - just the state's and nowhere else to shift debt to.
However, Rhode Island, like Connecticut, lacks county government, but only owed $3,103 a person in 2022 - less than half of Connecticut’s amount for every man, woman, and child.
Optimistic onlookers, meanwhile, continue to tout Connecticut's status as one of the richest states in the nation, asserting it can afford to carry more debt than certain other states.
Still, Connecticut's bonded debt in 2022 in terms of percent of personal income - 9.4 percent - was only topped by Hawaii.
The debt also ranked second in statistics comparing it the total value of all goods and services - again nine percent, and again only exceeded by Hawaii.
The numbers show a debt that is decidedly larger than most risk management experts would advise, with a simultaneous pension debt - estimated to be more than $37 billion at the start of 2024 - worsening matters.
'We enjoy a high quality of life in this state,' Lamont's budget advisor said in response to the nearly $29 billion racked up . 'And that does require continued capital investments for a variety of public facilities and infrastructure.' Workers are seen carrying materials in Stamford last year
Some lawmakers, most of them Democrats, continue to insist that borrowing is essential to the certain parts of the state's frameworks - such as education and job development.
But interest rates have risen drastically since the mid-2010s, making the concept increasingly difficult.
Connecticut's debt when it came to percentage of personal income and state GDP was also markedly over the national media, which OLR's report showed to be 2.2 percent and 2 percent, respectively.
Meanwhile, Hawaii has an income tax rate almost double that of Connecticut, which helps to clear up debt.
