Photo: Kelly Kultys / Hearst Connecticut Media
It’s a rare voter who credits a politician for thinking ahead.
Planning for the next downturn doesn’t excite the base, and making sure the state can weather difficult times ahead is not easy to summarize on a bumper sticker. Still, it’s vital for public institutions, including the state government, to put some money aside when it’s able to so matters do not grow quite so desperate when times of need inevitably arise.
On that note, state officials deserve credit for Connecticut’s high and growing rainy day fund.
State Comptroller Kevin Lembo and the Lamont administration separately project that Connecticut will have a more than $2.3 billion in reserve when the audit of the 2018-19 fiscal year is finished in late September. That far surpasses the record $1.37 billion the state held as late as June 2009, a time when the state needed more help than ever.
On top of that, projections from the Legislature’s nonpartisan Office of Fiscal Analysis show Connecticut could add $930 million more to the reserve over this fiscal year and next. By statute, the most the state can hold in reserve is 15 percent of operating costs, and if the current projections hold the state would be forced to spend if the reserve tops about $3 billion.
This is a good problem to have.
The top reason for Connecticut’s long-running fiscal malaise is a lack of growth, and solutions to that problem will not be found in the rainy day fund. But a close second in terms of contributing to our woes has been a lack of planning for the future. As mentioned earlier, there’s little immediate political reward for, say, shoring up pension funds or planning ways to pay off long-term debt.
But an earlier generation of leaders got us into this mess by paying too little attention to those types of issues, and the current crop says they have learned those lessons. Though it would be tempting to spend surplus dollars on splashy projects or givebacks to taxpayers, there is the future to think about. Connecticut’s pension funds have tens of billions of dollars in unfunded liabilities.
The Lamont administration has been cautious about adding too much to the state’s credit card, instituting what it calls a “debt diet” to keep long-term expenses in check. That kind of thinking can go too far and limit chances for economic growth, but done right it can help ensure a more stable future, one that is not characterized by bills we might never be able to pay. To date, the administration’s safe approach has paid some dividends.
The key is to maintain discipline, and in this matter top state officials seem to be on the same page. “If our state can keep to this promise, and maintain financial discipline, then Connecticut could be on the verge of a new day of fiscal stability and public trust,” Lembo said.
The political payoff could be far in the future, but that doesn’t make the effort any less important.