Connecticut's overall debt has fallen by 15% over the past three years, the state budget chief said in a report that triggered immediate sniping between Democrats and Republicans.
By 2013, the nominal total of the state's long-term state debt was $64.6 billion, Office of Policy and Management Director Benjamin Barnes said in a report to Gov. Dannel Malloy, released Thursday before the State Bond Commission's monthly meeting.
Barnes and Malloy, a Democrat, attributed the $11.6 billion in savings to increasing the state's payment into pensions and the generally accepted accounting principles deficit, creating a new pension tier and requiring state employees to contribute to their post-retirement health care.
"This progress has come during a period of significant fiscal stress," Barnes wrote.
State Republicans responded quickly.
"The Malloy administration's latest report on state debt is a complete work of fiction," said Senate Minority Leader John McKinney, R-Fairfield.
McKinney, referencing state Treasurer Denise Nappier's office, said bond debt has risen by $1.1 billion under Malloy, who took office in 2011. He also said Malloy has used state bonding for $1.5 billion of expenses that the general fund used to cover, and allocated $1.7 billion in general obligation bonds alone, $398 million more than he allocated the previous year and the most any administration had ever allocated in a single calendar year.
Malloy's communications director, Andrew Doba, accused the GOP of "baseless attacks."
Partisan bickering over state finances and even bond rating actions is common in Connecticut.
Moody's Investors Service rates Connecticut's GO bonds Aa3, while Fitch Ratings, Standard & Poor's and Kroll Bond Rating Agency assign equivalent AA ratings. Fitch in July revised its outlook to negative from stable, citing budgetary stress.
Barnes said the debt reduction tells just part of the story.
"This is because more conservative assumptions often increase the size of a projected liability while requiring more aggressive repayments, particularly in the area of pensions," he said.
He cited Connecticut's largest-ever annual contribution to the State Employee Retirement System in 2012. Despite that, he said, the valuation of the fund showed an increase in the unfunded liability of $1.2 billion, or 11%, which resulted from the state's decision to use more conservative assumptions about interest earnings, inflation and demographics.
According to the report, total outstanding bonded debt is roughly $20 billion, with the largest categories local school construction (27%), special tax obligation bonds for transportation (19%) and teachers retirement pension obligation bonds (13%).
"Despite accusations that the administration has borrowed for operating purposes, there have been no new deficit financings during the last three years," Malloy wrote. "Any recurring expenses included in the bond program are very small as a share of the state's debt and also represent recurring expenses that are of a capital nature."
