CONNECTICUT, USA — More than $1.3 billion captured from revenue sources over the last fiscal year is being used to pay down Connecticut’s pension debt. the announcement was made on Monday by Gov. Ned Lamont, Treasurer Erick Russell, and Comptroller Sean Scanlon.
This comes after budget reforms, which were enacted in 2017 and extended this year through budget legislation signed Lamont that require the state to deposit excess revenue from particularly volatile categories, such as portions of the personal income tax and pass-through entity tax, in the Budget Reserve Fund, commonly known as the Rainy Day Fund.
A total of $2.5 million of this volatility transfer will be placed in reserves, bringing the fund to its statutory cap. The remainder will be deposited in the pension funds for retired state workers and Connecticut teachers.
"Connecticut is making significant progress in addressing a decades-long underfunding of its pension system, saving taxpayers more than $600 million per year over the next 25 years. The bipartisan extension of the fiscal guardrails is why we are able to put another $1.3 billion this year toward the state’s unfunded pension liabilities, on top of the $5.8 billion previously transferred," said Lamont in a statement. "Members of the General Assembly, both Democrats and Republicans, have committed themselves to continuing the progress that has been made and should be applauded for their joint efforts. We have more work to do – now is not the time to lose focus and declare mission accomplished. Connecticut leaders must remain steadfastly committed to sound fiscal management practices, maintaining fiscal guardrails, and adhering to the spending cap. We owe it to our residents, businesses, children, and grandchildren to leave our state in far better financial shape than we found it."
Around $1.05 billion will be directed to the State Employees Retirement System. The remaining $272.8 million will be deposited in the Teachers’ Retirement System. The fiscal year 2023 budget surplus, projected to be more than $500 million, will also be directed to the Teachers’ Retirement System.
More than $7 billion in excess contributions have been made to pay down pension debt, resulting in future savings for Connecticut taxpayers.
This is the fourth consecutive fiscal year that additional contributions have been made to pay down pension debt.
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