Connecticut Comptroller Kevin Lembo has announced the state’s budget reserve fund, more commonly known as the rainy day fund, has reached a record-high balance of $3.03 billion. Its balance represents 15.1% of net general fund appropriations.
Lembo also projected Connecticut is heading into fiscal year 2021 with a $2.1 billion deficit and warned the record-setting balance might be short-lived as Connecticut strives to recover from the Covid-19 economic tumult.
“For months now, I have been warning that it was only a matter of time until we started to see the impact of Covid-19 on state revenues,” he said. “This is the rainy day we’ve been preparing for. Connecticut is fortunate to have built its reserve, leaving us more prepared than many states, but the federal government must step up to replace lost revenues and protect families, small businesses and municipalities from tax increases and devastating service cuts. It is unacceptable that Congress cannot come together to do the right thing.”
Separately, State Treasurer Shawn T. Wooden reported Connecticut’s overall available cash at the end of August was $6.7 billion, with the common cash pool – which contains the state’s operating cash of its many funds and accounts – at $5.6 billion.
“The spread of Covid-19 continues to devastate communities across our country, the economy continues to be strained, and unemployment levels remain unacceptably high,” Wooden said. “Due to work done prior to Covid-19, which focused on reducing risks and closely monitoring our liquidity position, Connecticut has maintained its strong cash position. Though our cash position is strong, Covid-19 continues to have a significant impact on state and local revenue.”
Wooden joined Lembo in seeking federal input, calling on Congress “to pass a second stimulus package, so that additional help can support small businesses, our state and municipalities.”
This page is available to subscribers. Click here to sign in or get access.