This from the governor:
“Governor Dannel P. Malloy today received a report from Office of Policy and Management (OPM) Secretary Benjamin Barnes that shows overall state debt has been reduced by 15% over the last three years, or $11.6 billion. The report points out that, “had action not been taken … the total of the state’s long-term obligations would have reached a high of $76.2 billion.”
The $11.6 billion in savings comes through a combination of factors, including increasing the state’s payment into pensions and the GAAP deficit, the creation of a new pension tier, and requiring state employees to contribute to their post-retirement health care.
“It won’t happen overnight, but we are taking the steps we need to pay down debt and shore up the state’s long term fiscal health,” Governor Malloy said. “We are tackling our long term debt in a responsible way, while still making the bold, necessary investments needed to help create jobs and grow our economy. Reducing the state’s debt will increase our financial stability over the long haul, and allow us to avoid repeating some of the bad mistakes that got us into trouble in the past.”
The report points out that: “Taking this disciplined approach to long term debts has come at a price. We have had to reduce spending on government services, strictly limit the replacement of retiring state employees, and significantly reduce the value of our retirement plans for virtually all employees and especially new employees. It is nevertheless critical that the state maintain or improve its financial strength – and its credit rating – by sustaining these efforts over time and ultimately reducing the impact of long-term debts on the state’s budget and economy.”