Connecticut State Treasurer Denise L. Nappier is taking State House Minority Leader Lawrence F. Cafero Jr. , R-Norwalk, and other Republicans to task for “misleading the public” on how she is managing the state’s cash flow. At issue is Cafero’s concern, that the treasurer is taking funds from the state’s bonded projects, and placing them in the general fund in order to keep the state’s budget in balance. Nappier says it is common to comingle funds in state government and that it is not costing the taxpayers’ interest money to engage in the practice.
Cafero is worried the state is not taking in enough money, even after the largest tax hike in Connecticut history, to off set what it is paying out. This is the third straight month Nappier has dipped into the capital improvement projects fund to meet general obligations. Cafero wants Nappier to go before a legislative committee to explain the situation, especially since every state budget operative, except Governor Dannel P. Malloy’s budget chief, all agree the state is operating in the red.
Although Nappier is correct to say borrowing from capital projects money is not costing taxpayers any more interest, is she trying to circumvent the state’s constitution? Connecticut is supposed to operate under a balanced budget, without having to rely on running up the state’s credit card. And her claim, at best, is nebulous. It would be like purchasing an item with your credit card, then selling it at a pawn shop for cash to pay the electric bill. You would pay no interest on the cash received for hocking the item, but you would certainly be paying interest on the original credit card purchase. And the state is paying interest on the bonded capital projects, whose money Nappier is now using to pay the state’s general obligation bills. And what’s to stop the governor, chairman of the state bond commission, from bonding projects that won’t start for years, so he can get money up front to keep the state budget in balance?
The practice may be common with this state treasurer – comingling funds in the private sector, such as real estate would land you in jail – but Cafero’s queries are any thing but “misleading.” The public does need to know, if those in charge of the state budget, are engaged in a constitutional end-around, not to mention whether the state budget is cracking under the weight of that largest tax hike in history.