Republican legislative leaders claimed Tuesday that Gov. Dannel P. Malloy’s decision to use $222 million that had been reserved to pay off 2009 borrowing won’t help the state’s credit rating.
Just two months ago, the Malloy administration told the Wall Street credit agencies that it would pay off the 2009 Economic Recovery Notes.
“It is of crucial importance that the governor, at very least, be honest with the bonding agencies,” House Minority Leader Lawrence Cafero, R-Norwalk, said Tuesday.
Sen. Minority Leader John McKinney called the plan to balance the budget “fiscally irresponsible.” He said Republicans are asking the governor if he’s alerted the rating agencies that the information his administration provided in March is no longer correct.
The state makes two presentations a year to the three credit rating agencies.
“The diversion of these funds to finance operational expenses is fiscally irresponsible and will lead to another downgrade by the agencies and ultimately higher interest rates on future bond issuances,” McKinney and Cafero wrote in a letter to Malloy on Tuesday.
The duo claimed that the Malloy administration made a presentation to credit rating agencies touting legislation which required the payment of the Economic Recovery Notes.
Ben Barnes, secretary of the Office of Policy and Management, said in a phone interview Tuesday evening that payment of the notes obviously “didn’t make a difference to them.”
He said the same information was included in a previous presentation to the three rating agencies. One of the three, Moody’s Investor Services, downgraded the state.
“Our efforts to pre-pay the Economic Recovery Notes didn’t carry much weight with the rating agencies,” Barnes said.
Moody’s Investor Services downgraded Connecticut’s rating from Aa2 to Aa3 in January noting “Connecticut’s high combined fixed costs for debt service and post employment benefits relative to the state’s budget; pension funded ratios that are among the lowest in the country and likely to remain well below average; and depleted reserves with slim prospects for near-term replenishment.”
The state is facing a deficit in the current fiscal year and the administration has a responsibility to present the General Assembly with a deficit mitigation plan, Barnes said. Using money reserved to pay off the notes is part of the solution the administration is putting forth. In addition, Barnes said he gave the chairs of the Appropriations Committee a list of spending cuts for the 2013 budget.
The Republicans seem to be suggesting the administration should do something else to erase the deficit, but Barnes pointed out “they don’t offer some other alternative for closing this gap.”
McKinney and Cafero called the use of the funds a “gimmick.”
“It’s a long litany of broken promises by this governor,” Cafero said. “. . . That he would not borrow money to pay operating expenses — he’s broken that promise as well.”
Malloy bristled at the use of the word “gimmick.”
“For Republicans to lecture me on what is or is not an appropriate way to balance the budget — listen I didn’t run up a structural deficit of $3.6 billion,” Malloy said. “I didn’t spend every dollar that was in the cookie jar.”
Malloy made clear that he inherited a $3.6 billion deficit created by the previous administration.
Support authentic, locally owned and operated public service journalism!
Asked if spending cuts would be harder, Malloy said “spending cuts are hard. Change is hard. Try living my life and telling people they have to change.”
He maintained that the budget shortfall wasn’t as bad as some were making it out to be.
“It’s a one percent miss. I’ll admit that,” Malloy said. But he refused to accept the Republicans’ argument that it makes his first budget a failure.
“I think the failure in Connecticut’s most recent history is the building of a $3.6 billion structural deficit,” Malloy said.
More State Budget news

Stefanowski Talks Abortion, Employee Raises & Budget In First Press Conference
For a half-hour Wednesday, Bob Stefanowski stood outside the state Capitol and fielded questions on abortion rights and state employee raises in a sign the Republican candidate plans to run a more conventional campaign in this year’s rematch with Gov. Ned Lamont.
Keep reading
Lamont Signs The Budget
Alongside Democratic legislative leaders, Gov. Ned Lamont signed the $24 billion budget adjustment Monday that includes $600 million in tax relief. That’s more than they anticipated they would be able to offer Connecticut residents this Election year because revenue came in higher than expected, but it still creates about an $800 million deficit in 2024. …
Keep reading
ANALYSIS | It’s A Wrap: The Winners and Losers of the 2022 Session
It was a short legislative session, but the House and the Senate were able to move a lot of business this year, including the passage of a $24-billion budget with around $600 million in tax cuts.
Keep reading
Connecticut Acts To Help Its Lead-Poisoned Children
After decades of inertia, Connecticut is finally moving to help its thousands of lead-poisoned children and prevent thousands of other young children from being damaged by the widespread neurotoxin.
Keep reading
Bill Bolstering Contracting Oversight Board In Jeopardy After Lamont Administration Raises Concerns
It passed unanimously in the Senate, but a bill that would give the State Contracting Standards Board greater oversight over state contracting appeared stalled in the House Wednesday on the last day of session. “The governor and I have not talked about the bill,” House Speaker Matt Ritter said. “The commissioners have sent us a…
Keep reading
Senate Approves Tax Cuts, Sends $24B Budget to the Governor
The state Senate gave final approval late Tuesday to a $24 billion election year budget plan that includes around $600 million in tax relief while enabling the state to make an $3.5 billion payment on its unfunded pension debt. Senators voted 24-12 at around 10:30 p.m. to send the midterm budget adjustment to the desk…
Keep reading
House Green-Lights $24B Budget
On a party-line vote early Tuesday, the House passed a $24 billion budget adjustment package containing more than $600 million in tax cuts which Democrats heralded as “historic” and Republicans derided as temporary. Lawmakers voted 95 – 52 at around 12:20 a.m. to send the 673-page budget document to the Senate for consideration before the…
Keep reading
Budget Materials
The General Assembly is preparing to debate adjustments to the $24 billion state budget. Below are a few of the documents we’ve been provided as back-up materials. The budget, HB 5506. Town runs. Car tax impact on municipalities. Finance Committee Power Point.
Keep reading
Lawmakers May Vote for First Pay Increase in 20 Years
With legislative retirements mounting, lawmakers on both sides of the aisle were considering Monday raising the salaries of General Assembly members for the first time in more than two decades and indexing their pay in the future. During a morning press briefing, House Speaker Matt Ritter told reporters that funding for pay raises had been…
Keep reading
Amid Surging Revenue, House Prepares to Vote on Budget Adjustments
Connecticut’s House of Representatives was expected to vote Monday on a $24 billion budget adjustment package, buoyed by revised revenue predictions that exceeded expectations by more than $350 million. The revised consensus figures released Monday confirm the surge in revenues that enabled Gov. Ned Lamont and legislative Democrats to reach an agreement last week on…
Keep reading
Dems Detail Budget Deal With $500 Mil in Tax Cuts, Extension of Gas Tax Holiday
Legislative Democrats and Gov. Ned Lamont’s administration announced Wednesday the details of a $24.2 billion budget adjustment package, which they say provides around $500 million in tax relief including extending a gas tax holiday until December. Lamont and legislative leaders outlined the agreement during an afternoon press conference in the state Capitol building. Both chambers…
Keep reading
Health Care Workers Call for New Hires
After a record number of health care workers are expected to retire this year, health care staff called on Gov. Ned Lamont to commit to filling 1,000 vacant positions by August 1 of this year. A record 1,137 state workers who notified the state that they will retire this year comes at a moment of…
Keep reading
Senate Joins House And Votes To Give Raises, Bonuses To State Employees
The Senate gave final approval by a 22-13 vote on a plan to give unionized state workers a set of raises and bonuses. The plan, negotiated by Gov. Ned Lamont’s administration and a coalition of public sector labor unions, provides three years of 2.5% raises and step increases as well as a total of $3,500…
Keep reading
House Advances Labor Deal In Historic Vote
Lawmakers in Connecticut’s House of Representatives signed off on a plan to give state workers a set of raises and bonuses Thursday in a mostly partisan vote on a negotiated labor agreement. The House voted 96 to 52 in support of the deal with 1 Republican, Rep. Tom Delnicki of South Windsor, joining all Democrats…
Keep reading
Republicans Propose Last-Minute Tax Package
Legislative Republicans pitched a $1.2 billion tax relief plan Thursday which reduces state income, sales and gas taxes and proposes to join other states in suing the federal government to challenge restrictions on spending pandemic relief funds. House and Senate Republicans announced the plan during a state Capitol press conference Thursday morning. It cuts the…
Keep reading
The Budget Battle Begins To Take Shape
Tax collections have improved and pushed Connecticut’s budget surplus to $4 billion, but the state budget still relies heavily on federal funding and without it the state would end up running a “sizeable operating deficit.” The Office of Policy and Management told state Comptroller Natalie Braswell Wednesday that if not for the use of the…
Keep reading