Face the Facts: A Look at the Budget Surplus and What The Money Can Be Used For - NBC Connecticut

CT Mirror Budget Reporter Keith Phaneuf joins NBC Connecticut's Mike Hydeck to speech astir the Rainy Day Fund and the anticipated fund surplus including the rules for however it tin beryllium used.

Mike Hydeck: As the politician surrounds himself with caller advisors successful his adjacent term, helium volition astir surely beryllium pressured to usage immoderate of the staggering magnitude of fund surplus wealth connected things similar taxation breaks and heating assistance and the aforementioned leader pay. And due to the fact that of the mode our fund is acceptable up, erstwhile hedge funds bash good successful Connecticut, taxation receipts spell mode up, which continues to hap contempt the speech of a looming recession. But the politician is inactive hesitant to pat into those reserves. So however good disconnected truly are we fund wise? And wherefore is the politician seemingly the lone guardian of the surplus? Connecticut Mirror authorities concern newsman Keith Phaneuf has been covering authorities fund issues successful extent for much than 3 decades. He joins america present with a small perspective. Keith, invited backmost to Face the Facts.

Keith Phaneuf: Thanks for having me, Mike.

Mike Hydeck: So Republicans accidental with the skyrocketing substance costs expected this wintertime due to the fact that of the state proviso shortage, present is the clip to commencement expanding the authorities Heating Assistance Program truthful radical tin commencement to fund earlier it gets cold. Can they legally bash thing to pat into the Rainy Day Fund? Or is the politician conscionable lasting successful the way?

Keith Phaneuf: Oh, determination are each kinds of ineligible options. I person to archer you, I ever retrieve Governor Rell utilized to ever similar to accidental that wealth is fungible, the authorities fund is truthful fungible, it's flexible, and that's decidedly the lawsuit here. Without trying to instrumentality up excessively overmuch of your time, conscionable successful the existent fiscal twelvemonth we are projected to tally $2.8 cardinal dollars close present successful the black. So we're talking astir a surplus of astir 13 percent. The fiscal twelvemonth doesn't adjacent until June 30. There's much than capable wealth close successful that and determination are different pots of wealth we tin discuss. If you wanted to boost wintertime heating assistance to the level that vigor advocates are saying, you fundamentally person to spell from astir $90 cardinal to $110 million. Again, we person a $2.8 cardinal surplus. Excuse me, we'd person to adhd $110 million. We'd person to spell from $90 to $200 million. And I'm atrocious to propulsion each the numbers. You're talking astir a precise tiny fraction of the surplus. The crushed radical are hesitating is due to the fact that we've ne'er utilized authorities wealth for this wintertime heating assistance programme before. LIHEAP, arsenic its known, Low Income Housing Energy Assistance Program has ever been funded strictly with national dollars. The occupation is, since the pandemic, the national authorities conscionable truly hasn't ever been putting up anyplace capable wealth to conscionable the demand. The Republicans are saying, let's enactment up authorities money. If Congress comes done with more, we tin ever propulsion the authorities wealth back. But if Congress doesn't travel done with more, oregon adjacent if we conscionable permission things with a question mark, seniors and others volition statesman rationing their groceries and their pharmaceuticals close present due to the fact that they'll beryllium disquieted trying to marque their heating fund agelong each winter.

Mike Hydeck: So successful your reporting, you person said that this projected surplus successful the authorities tin support services, marque agelong word indebtedness payments, for however long? How agelong bash you think, arsenic we are present and again, we proceed to person we conscionable had different study retired that said that there's adjacent much wealth coming in. So however agelong arsenic we sit, wealth wise, tin we wage our debts and wage our bills with the fund we have?

Keith Phaneuf: That truly is the question Mike. And I americium atrocious due to the fact that I'm going to propulsion much numbers. And I'll effort not to person each your viewers conscionable confused. But if you tin benignant of travel the bouncing ball, we commencement with our Rainy Day Fund. There's $3.3 cardinal successful there. And I'll springiness you immoderate position connected each this connected what they truly basal for. There's different $1.4 cardinal successful national pandemic alleviation that we've been specifically redeeming to assistance america with the adjacent 2 fiscal years. So present we're up to $4.7 billion. And past there's the projected surplus for the existent fiscal year. Even though we can't enactment that successful the Rainy Day Fund, there's a mechanics called a transportation guardant wherever if we had to, we could transportation guardant appropriations from this twelvemonth into the adjacent biannual rhythm to screen expenses. That's $7.5 cardinal successful options and here's the perspective: that's astir 30 percent of the wide fund. Thirty percent. I mean, truthful basically, you could tally authorities for astir 30 percent of the twelvemonth if not a penny ever came in, which of people would ne'er happen. To springiness you immoderate different perspective, erstwhile we went done what economists called the Great Recession successful 2008 and 2009, we emptied a Rainy Day Fund, we borrowed a cardinal dollars and past Governor Malloy inherited a built successful shortage and had to rise taxes. All the chaos betwixt astir 2008, emptying the Rainy Day Fund, the borrowing the taxation increases, each the chaos betwixt 2008 and 2011, amounted to astir 30 percent of the budget. No politician successful modern past has had this galore sandbags piled against the fiscal stream similar Governor Lamont has.

Mike Hydeck: Wow. Alright, truthful 1 past question. The 2017 bipartisan fund enactment the safeguards successful spot truthful either enactment can't raid the Rainy Day Fund aft the money is, you know, taken attraction of 15 percent of operating expenses, we person truthful overmuch more. Do you deliberation this has to beryllium possibly readjusted successful the aboriginal to possibly enactment that threshold higher than 15%? Can authorities lawmakers bash that? Is that thing connected the table, would you say?

Keith Phaneuf: I deliberation radical volition speech astir it. I deliberation due to the fact that the surplus has gotten truthful large, cipher is going to beryllium comfy pushing it higher. But again, if you wanted to, and it's funny, we're gonna marque wealth like, a speech of further $100 cardinal for heating assistance, oregon similar you mentioned earlier, they've been talking astir putting an other $100 million, present it looks similar it's gonna beryllium less, successful the leader wage program. As large arsenic you know, $100 cardinal sounds to you and me, we're talking astir thing that is astir 1 percent of that immense cushion that I'm talking about. And successful this case, the leader wage is simply a 1 clip expenditure. You could bash that conscionable by taking that retired of this year's surplus. You wouldn't request immoderate peculiar maneuvers to bash it.

Mike Hydeck: It's astir similar extremity wealth by examination due to the fact that the numbers are conscionable truthful big. State fund guru Keith Phaneuf, acknowledgment truthful overmuch for joining us. Your reporting successful CT Mirror is fantabulous and your expertise is precise valued connected Face the Facts. We admit you.