CPAs to Lawmakers: The State Is Broke
The Connecticut Society of Certified Public Accountants were at the Capitol Tuesday trying to give legislators the courage to do the right thing by getting rid of the state’s long and short term financial debt.
“Connecticut is broke. Not going broke, but broke,” Marcia Marien, president of the organization, said.
She said not counting the state’s unfunded pension liabilities Connecticut’s debt is equal to $4,859 for every man, woman, and child in the state. Counting the unfunded pension liabilities, other post employment benefits, and other liabilities and that number jumps to $46,100 per person.
“There is no state that owes more money than we do,” Marien concluded.
Marien’s presentation which can be viewed online here says that state’s assets total $15 billion and the state’s liabilities total $29 billion. She said for those in the room thinking other states must be facing similar situations, they’re not.
She said only four states have less than one percent of their available funds available in their fund balance. She said the only state worse off than Connecticut, may be California.
For those wondering how the state got to this point, Marien said it’s simple. State tax revenues have dropped and will be 2.6 percent less in 2011 than they were in 2006. Over the last five years revenue has only grown five percent while spending has grown 28 percent.
Over the past two years the state has done everything it can to avoid having to deal with the state’s actual deficit, including the use of federal stimulus funds, rainy day funds, and deferral of pension payments. She said the state is on the edge of a tremendous funding cliff if it doesn’t take action this year.
She said she applauds Gov. Dannel P. Malloy for deciding not to borrow to cover operating expenses, funding the actuarially required pension contribution, and switching to General Accepted Accounting Principles. However, she said she would like to see the state switch to full GAAP accrual, which accounts not only for short term liabilities and debt, but long term ones.
“In simple terms it’s just arithmetic,” Art Renner, executive director of the organization, said. “The numbers are telling a story. One of these days, and the day is getting closer and closer, there’s going to be massive problems if we don’t do something to stem this tide.“
“Ours is the easy part is to tell the story, yours is the hard part to change the story,“ Marien said as she turned to Rep. Vincent Candelora, R-North Branford.
Candelora pointed out that he didn’t have gray hair when he was first elected.
Candelora was one of the many Republican lawmakers in the room listening to the presentation Tuesday. But Marien said she wants to make sure lawmakers from both political parties hear her message. To that end the organization has reached out to Democratic lawmakers too.
“We don’t want to be political we want everyone to work together to fix the problem,” Marien said.
She said she’s working to make sure the lawmakers that make the hard decisions continue to get elected even if those decisions for the state’s long term fiscal health aren’t politically popular.