Members of Connecticut’s financial leadership touted the state’s full coffers and balanced budget during a press briefing on Thursday afternoon.
The meeting, held to mark the end of the 2022 fiscal year, gave the governor and the heads of both the Office of Policy and Management and the Comptroller’s Office, a chance to highlight what they saw as financial gains for the state this year. It also gave them an opportunity to set conservative goals and expectations going into 2023 with high inflation and a potential looming recession.
Connecticut Comptroller Natalie Braswell was the first to the podium, offering an overview of the state’s current financial status. According to Braswell, Connecticut’s much-publicized budget windfall this year has allowed the state to continue making payments toward its massive pension debt.
“New analysis done by our actuaries show that these extra payments will eliminate $11.5 billion in pension debt,” said Braswell. “A burden that our children, grandchildren, will otherwise not have inherited.”
Braswell also noted that the Lamont administration had freed up about $1.2 billion in budgetary savings over the next three fiscal years.
Office of Policy and Management Secretary Jeffery Beckham, meanwhile, highlighted the state’s $1 billion operating surplus this year and noted that the state’s credit had been upgraded by four rating agencies. Beckham also noted that the budget reserve fund ended the fiscal year with a surplus of $7 billion, allowing for an actual pension deposit of $3.7 billion.
Much of Beckham’s time, though, was focused on the projected strength of the state’s current financial health and the ways in which this year’s budget surplus could be used to weather potential economic turbulence down the road.
With inflation still at record high levels and the U.S. Federal Reserve raising interest rates to combat it, economists are preparing the public for a potential recession late this year or early 2023. According to Beckham, Connecticut is in a much better position to come out the other side of any financial downturn than in previous years, thanks to new laws protecting the state budget and a $300 million budgetary cushion in 2023.
“We would have to have revenue projections off by more than $3 billion before we would need to resort to the budget reserve fund,” said Beckham.
With that potential turbulence on the horizon, both Beckham and Gov. Lamont stressed conservative estimates and projections going into the new fiscal year. State revenue is projected to remain mostly flat and Beckham stressed that the goal of his office is to “always balance the budget.”
“I wanted folks who count on the revenues, count on education funding, count on mental health to know that we’ve got a budget that is projected to be able to maintain our commitments there without any cuts for the next two or three years,” said Lamont, who is running for re-election this year on a platform of budget cuts and fiscal responsibility.
His political opponents, however, believe the current administration should be doing more to cut taxes and relieve the financial burden of individual residents.