State Prepares for $550 Million Emergency Loan

Connecticut is preparing a contingency plan in case the state has trouble paying its obligations. Treasurer Denise L. Nappier outlined the plan in a letter addressed to Gov. Dannel P. Malloy.

“Given the fiscal challenges facing the State, I believe it is prudent to prepare for the potential – though still not certain – need to borrow funds externally in order to fund cash flow requirements for current operations,” Nappier wrote.

The Connecticut Mirror published the letter.

The state faces a $415 million deficit in the current fiscal year. A number of cuts totaling $170 million enacted by Gov. Malloy brought the actual deficit down to $290 million.

The cuts affected many departments, such as $32.2 million from the Department of Social Services and $14.4 million from state colleges.