Connecticut’s total bonded debt, reaching $8,000 per person, has earned it the top spot in the nation for state debt burdens, a recent report reveals. This figure is more than four times the national average, reflecting a longstanding reliance on borrowing to fund infrastructure and other state projects.
Massive Debt Load Leaves Connecticut Ahead of All States
Connecticut’s financial obligations continue to draw attention due to its significant bonded debt. In 2022, the state’s bonded debt per capita stood at a staggering $7,988, according to a report from the General Assembly’s nonpartisan Office of Legislative Analysis. This number places Connecticut far ahead of other states, where the average is $1,808. The report highlights how Connecticut’s borrowing practices have kept the state at the top of the debt ranks.
The state’s debt load is primarily driven by a combination of school construction, transportation work, and other public infrastructure investments. For years, these financial obligations have been overshadowed by the more prominent issue of Connecticut’s pension debt, but this recent study sheds light on the broader picture of the state’s fiscal challenges.
The state government, under Governor Ned Lamont, has often defended the need for continued investment in public facilities, noting that Connecticut enjoys a high quality of life, and that maintaining infrastructure requires significant capital. Chris Collibee, Lamont’s budget spokesman, emphasized this point when he remarked on the state’s support of school construction, with reimbursements covering as much as 80% of costs. “We enjoy a high quality of life in this state, and that does require continued capital investments for a variety of public facilities and infrastructure,” he said.
Connecticut’s Debt and Fiscal Health: A Balancing Act
However, the high debt per capita brings to the forefront the balancing act Connecticut faces between investment and fiscal responsibility. Lamont’s administration has pushed for a “debt diet” since he took office in 2019, encouraging legislators to limit borrowing and focus on reducing the state’s financial burdens. Despite the governor’s challenges to trim borrowing, the General Assembly has shown resistance, particularly from his fellow Democrats.
Despite various budgetary constraints, including a spending cap, some lawmakers argue that borrowing is essential to maintaining funding for critical areas such as education and job development, especially in Connecticut’s poorer urban centers. Borrowing also plays a role in alleviating the state’s fiscal issues, where it is not uncommon for other states to rely on local governments for projects that Connecticut funds directly.
In recent years, Connecticut has shown efforts to curb the debt. The state’s Treasury reports indicate that in 2015, nearly $3.1 billion in bonds were issued, with almost the same amount in 2016. This figure has since decreased, with Connecticut expecting to sell around $2.6 billion in bonds this fiscal year. In May 2024, the state took further action to reduce its bonded debt, focusing on highway, bridge, and rail projects. This move involved using $500 million from the Special Transportation Fund’s unspent reserves to retire high-interest bonds ahead of schedule, with projected savings of $60 million annually by 2026 and up to $75 million by 2028.
However, not everyone agrees that the state is doing enough to reduce its reliance on bonds. Critics, including House Minority Leader Vincent Candelora, argue that Connecticut’s lawmakers should prioritize further debt reduction. The Republican leader pointed out that while the state does provide financial support for municipalities through bonding, much of the state’s borrowing practices remain problematic, including using bonds to cover non-education-related municipal grants and small projects favored by individual lawmakers.
Comparative Debt: How Connecticut Stacks Up
When compared to other states, Connecticut’s debt burden stands out in stark contrast. Rhode Island, which lacks county governments like Connecticut, had a per capita bonded debt of $3,103 in 2022—less than half of Connecticut’s per capita debt. This comparison underscores the heavy reliance Connecticut has on borrowing for various initiatives, some of which could be funded through cash payments in the state’s budget.
Notably, the state’s fiscal practices have drawn increasing scrutiny in recent years, particularly its tendency to use borrowing as a means to cover other borrowing. Connecticut has been relying on this strategy for decades—using new borrowing to make payments on previous debts, a practice some critics liken to using one credit card to pay off another. This fiscal approach remains a contentious issue in state politics, with some lawmakers pushing for a more aggressive focus on cutting the state’s bond issues and reducing its overall debt load.
Looking Ahead: How Connecticut Can Address Its Debt Problem
As Connecticut looks to the future, its leaders are faced with difficult choices in addressing its high level of bonded debt. Governor Lamont and Treasurer Erick Russell have made efforts to slow the growth of debt through strategic bond management and early debt retirement, but critics continue to call for a more decisive reduction in borrowing.
Despite the push for fiscal prudence, Connecticut’s position as one of the wealthiest states gives it more leeway in carrying higher debt than many other states. However, the continued rise in bonded debt and the pressure it places on taxpayers cannot be ignored.
As lawmakers weigh the future of the state’s borrowing practices, the upcoming fiscal years will be crucial in determining whether Connecticut can strike a balance between maintaining its infrastructure investments and managing the ever-growing debt burden that has now become a hallmark of its fiscal landscape.
Comments