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State House Speaker Matt Ritter is shocked – SHOCKED!

Connecticut is awash in Wall Street money, and the extra bennies from Wall Street will enable Connecticut to pay down a slender portion of its pension debts.

“This” – the unanticipated boost in state revenue -- Ritter said, “might be the most shocking consensus revenue numbers we’ve seen in years. Positive, yes. Right now, we’re in good times. Yes, it is [Wall Street] money, so we’ll have to continue to talk about that as we go forward. If I hear the word ‘deficit’ – folks, the state is in a very solid financial position.”

Ritter, of course is talking about Connecticut’s most recent budget, and his joy is dampened by doubt.

The Yankee Institute told us in late June of 2021, “According to Connecticut’s 2020 Comprehensive Annual Financial Report, the state’s unfunded pension liabilities for state employees, teachers and judges sits at roughly $40 billion,” a mountain, not a mole hill. “And, according to 2020 state reports for Connecticut’s two largest and most unfunded pension systems, the State Employee Retirement System is 35.8 percent funded, while the Teachers Retirement System is 51.3 percent funded.”

This is the deficit that haunts Ritter, whose matchless ebullience concerning Connecticut’s “solid” position in the nation’s economic universe had caused him to bracket his statement about the state’s “good times” with several reservations. “Right now” we’re in good times, and it is true that the unexpected state revenue funds come from precarious Wall Street investments. Ritter and free spending Democrats in the state’s General Assembly will “have to continue to talk about that as we go forward.” But really, deficit me no deficits, because “the state is in a very solid financial position” – for now.

Citing Truth in Accounting’s annual Financial State of the States 2021 report, the Yankee Institute reported at the end of September, 2021, “As Connecticut prepares to make a historic $1.6 billion payment toward its unfunded pensions, a new report shows Connecticut has the highest taxpayer debt of any state in the nation… Federal support to Connecticut during the pandemic coupled with higher-than-expected income tax revenue related to investment earnings allowed Connecticut to bridge a $3.5 billion biannual deficit. It also allowed Connecticut to keep its rainy day fund intact and thereby transfer $1.6 billion to pay down pension debt through the state’s volatility cap.”

The Yankee Institute noted, “The annual cost of Connecticut’s fixed costs – which include fringe benefits and debt service – are projected to increase $1.4 billion by 2023, according to the Office of Fiscal Analysis. However, the state’s pension payoff will save more than $71 million in the General Fund and Special Transportation Fund.”

Current budgets measure only current fiscal year costs, a tip of a very large iceberg.

Ritter is right to temper his bout of optimism with large doses of dispiriting reality, and he knows full well that budget infusions from the Feds are always unreliable. When they end, states are left holding the bill and then must increase taxes or cut spending. That is to say, they must grievously disappoint either tax payers or tax consumers.

Pig meet lipstick. Reality is the pig, momentary lapses into unreality is the lipstick.

The real solution to Connecticut’s mounting deficit is to face reality -- always obscured by political magicians during election periods – and to cut spending, long-term, permanently.

Prophylactic injections of temporary federal handouts are, at best, “solutions” that simply postpone the debtor’s day of reckoning. The absurd notion that one may spend one’s way out of debt is what led Charles Dickens’ Micawber to debtors’ prison, and blinding enlightenment: “Annual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Charles Dickens’ own father was put into debtors prison. The absurd practice of indefinite imprisonment for non-payment of debt ended in 1869 with the passage of The Debtors Act.

My wife Andrée, who pays her debts even before they are officially registered on payment accounts, humorously suggested a few days ago that debtors prisons should be reinstituted in Connecticut -- but only for debt-enabling politicians who, Micawber-like, are blissfully unconcerned with inflationary improvident spending. The debt will be passed on for payment eventually to the children and grandchildren of people now represented in the General Assembly by thoughtless spendthrifts.

Shouldn’t her debtors prison, I asked, open wide its gated mouth to receive politicians unconcerned with the devaluation of the dollar (inflation), the excessive borrowing of money (inflation), costly and burdensome regulations never reviewed by economic auditors (inflation), and the high price of good and services owing, in part, to inflation?

She promised to think about my suggestion sometime after she has finished paying this year’s debts, a good portion of which are tax payments.

Ritter, and other progressive legislators in Connecticut, should be shocked – SHOCKED! -- by the size of Connecticut’s payment obligations.

The Statista Research Department told us on February 6, 2024, “In the fiscal year of 2022, the state debt of Connecticut totaled to about 41 billion U.S. dollars. In that same year, the state's local government debt was about 11.74 billion U.S. dollars. Comparatively, the state's debt in 2000 stood at approximately 18.46 billion U.S. dollars, and its local government debt at 5.04 billion U.S. dollars.”

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