State
Continues to Borrow, Come Hell or High Water
Susan Kniep, The Federation of Connecticut
Taxpayer Organizations, Jan 30, 2013
On
January 29, 2013, we learned that State budget deficits continue to grow due to
the inability of our State legislators to grasp the seriousness of the State
budget crisis. Their failure to apply
State budget cuts long term has resulted in the following projections by the
Legislature’s Office of Fiscal Analysis:
Spending will surpass revenues by $1.2 billion in the fiscal year which
begins July 1. Deficits in the fiscal
year budget for 2014-2015 will exceed $1.3 billion.
Not only are the Governor and our State Legislators running
annual state budget deficits, but they have burdened State taxpayers with the
highest per capita long term debt in the country, which now exceeds $5,000 per
person.
And they are not done yet!
As the State Bond Commission met on January 25, 2013 and approved
another $575 million to bond projects, Governor Malloy indicated that where
last year’s bonded projects totaled $1.4 billion, this year’s bonded projects
could reach $1.8 billion.
And remember bonding is like paying down your mortgage where interest payments
are added onto the cost of the expense.
As the Journal Inquired reported one of those projects drew
the attention of state
Rep. Sean J. Williams, R-Watertown,who
“opposed funding for economic development grants to companies in Stamford and Bloomfield and
to the Wadsworth Atheneum Museum
of Art in Hartford. “The Stamford deal was a $7 million grant for
environmental fixes to enable the hedge fund Bridgewater Associates to relocate
from Westport. “The firm, which manages $130 billion in investments, is one of
the companies getting aid from the state through the “First Five” jobs program
to build its new headquarters. “The deal includes a $25 million forgivable
loan, job training grants up to $5 million, grants up to $5 million to install
“alternative energy systems,” and up to $80 million in tax credits. “
Williams said companies like Bridgewater
don't need the state's help.
“I do not think that state government should be in the position to be serving
as a bank for businesses, especially those large businesses that could go into
the private market and get financing on their own,” he said.
Many would agree with Williams, and it would be reasonable
to ask why Connecticut taxpayers, many of whom are underemployed, unemployed,
or seniors on fixed incomes are helping to fund this deal when considering as
the Hartford courant reported “Bridgewater's founder and chief investment
officer, Ray Dalio, is the highest paid hedge fund
manager in the world, pulling in $3.9 billion in 2011” with a reported net
worth of $10 billion as reported by Forbes.
But as the State funnels taxpayer dollars to Bridgewater of $115 million, there are other questions
being raised as to the viability of the project due to its intended location
which is on Stamford’s
waterfront, within a high-risk flood zone.
If we have another storm like Sandy,
will Bridgewater
receive an even greater bailout if they are underwater.