Lt. Gov. Wyman Addresses Connecticut's Finances in Farmington

Editor's Note: At the end of October, Lt. Gov. Nancy Wyman was the keynote speaker at a CT Society of Government Accountants conference at the Farmington Club. Here's what she had to say in her speech, as provided by her staff. 

Wyman's Speech:

I’m here to talk about how the Governor and I are moving the state forward. But in order to do so we have to take a quick look at the past. 

It’s no secret the state was headed in the wrong direction in a lot of ways for a very long time.There’s no point in rehashing all the reasons why – but those years of shortsighted fiscal neglect left us a tidy $3.6 Billion deficit and an empty Rainy Day Fund when we took office.

Yes, we raised taxes to give us the revenue to start turning the ship around – and no one disliked doing so more than the Governor and me. 

A major reason we raised taxes was to try to take some of the burden off our cities and towns.

The goal of our first budget and every one since has been to hold cities and towns harmless – especially when it comes to their crucial ECS funding. 

Most towns have seen a small increase and many others were flat-funded. 

And because there has not been a lot of extra revenue to spread around for infrastructure, we have been trying to helping towns with bonding and federal grants.

We have made job creation a major priority – and even though it has not been fast or strong enough for any of us, we have seen tens of thousands of jobs created since we took office.

We attracted large corporations like Jackson Labs and NBC Sports. We have made loans or grants to more than 900 small businesses through the Small Business Express Program.

We’ve invested in affordable housing so people will stay here and contribute to economy. 

And we are again promoting and funding tourism to bring out-of-state visitors and their dollars here. 

We have implemented the most comprehensive education reform in nation with the goal of better preparing our students for higher education and the workforce.

Last year we saw a 2.1 percent increase in students graduating high school. We are focusing on early education – and opened nearly 1,000 new slots last year 

We have expanded a very successful precision manufacturing program to community colleges across the state – creating a direct pipeline from the classroom to companies desperate for skilled workers.

And our Next Generation CT initiative will create a new wave of engineers and other science and math professionals at UConn. 

One thing that does not get a lot of headlines is that state government is at least 1,200 positions smaller than when we took office. 

State agencies are moving toward the lean operating model in order to improve efficiency and response time.

Permits used to take more than 90 days to get approval are now approved in 30.

Two weeks ago, the Governor issued another executive order that directs agencies to identify regulations that are obsolete, duplicative, excessively burdensome, or otherwise ineffective or unnecessary

We want all regulations to be cost-effective, accessible and transparent.

This is what must be done to give the business community and municipalities confidence that we want to help them – not work against them 

We’re moving enormous agencies like DSS out of dark ages with new technology.

And we are finally fully funding our state pension plan and have made significant changes that will save $20 billion over 20 years 

Transportation was another critical area that was ignored for too long.

We are putting $1 billion of state and federal funding into roads and bridges.

You’ve probably noticed all the construction projects happening all over the state as we resurface 250 miles of state roads and restore more than 40 bridges 

We’re investing in rail to get more cars off the road.

We finished the Q Bridge in New Haven 8 months ahead of schedule and $220 million under budget 

When is the last time you heard those words in the same sentence as state government? 

We are taking the smart approach by tackling these maintenance projects now so we aren’t paying more out-of-pocket down the road. 

GAAP 

I’m sure there is more than one person in this room that has heard me talk about GAAP.

But I’m very happy to say this is the first time I have been able to say that we are finally implementing it. 

As you probably know, one of the Governor’s first actions when we took office was to issue Executive Order No. 1 – ordering the state to prepare a plan to bring itself into GAAP compliance.

We knew that if we were going to get out fiscal house in order we had to fix this chronic structural flaw in our finances.

And starting in the current fiscal year, we are transitioning our budget framework from modified cash to GAAP.

We are also taking major steps toward eliminating the accumulated GAAP deficit of nearly $1.2 billion that has been growing for the last two decades.

Last legislative session, the General Assembly approved bonding $575 million to begin paying down that debt over the next 15 years.

The $575 million will be in General Obligation, GAAP Conversion Bonds and will immediately cut the deficit in half on our balance sheet.

That also means we will immediately increase the state’s total available cash – which was reduced by carrying that enormous deficit.

The remainder of the deficit will be paid off with annual appropriations of about $46 million from fiscal 2016 to fiscal 2028. I know there are some who fear that this money will somehow be slipped into the General Fund and used for other purposes.

Can you imagine that there are people who don’t trust the government to do what it says it’s going to do? 

But that is why the bonding includes a covenant that says it cannot be counted as General Fund revenue.

I assure you that the Governor and I are committed to keeping that commitment to fiscal responsibility – covenant or not.

So where does all this leave us for the current fiscal year? 

General Fund Budget Balance

Our cash balances are strong and should be sufficient for the rest of the year – without any borrowing.

We have a $300 million stand-by line of credit that will be allowed to expire on schedule in 

December without having been tapped and without paying any bank fees.

Our Rainy Day Fund, which was empty when we took office, will contain $271 million.

We realize that is only 1.6% of General Fund appropriations, far short of our target level of 10%.

But it is a step in the right direction, and legislation passed last session again makes replenishing the Rainy Day Fund a priority.

The bottom line is that we have a long way to go, but in the last three years we believe we have ended 20 years of questionable fiscal management and are poised to move forward in a positive direction.