Connecticut has allocated approximately $10 billion toward fulfilling its pension obligations over the past five years, according to two reports released on Wednesday.
The state pension funds for retired teachers and state workers grew by $2.3 billion this year, due to strong investment performance and the billions of dollars in state contributions, said state Treasurer Erick Russell.
“What we’ve seen is not only an impact on the pension fund, but we’ve seen numerous credit rating upgrades here in the state,” Russell said.
The pension obligations are now nearly two-thirds funded, up from less than a third a decade ago, said state Comptroller Sean Scanlon.
“What that really, really means is that $857 million of new money underneath the spending cap is available for the governor and the legislature to use on things like making Connecticut more affordable,” Scanlon said.
Governor Ned Lamont agrees that the savings are saving big dividends for taxpayers, but he is cautious about spending the money.
“I can use those in a way like we are doing for early childhood education and to make up for some of the Trump tax cuts. But you’ve got to worry about using very volatile revenues for long-term operating expenses,” Lamont said.
The money comes from the 2017 budget agreement, which ordered that excess revenue from stock market windfalls be put in the Rainy Day Fund. And any further excesses will be used to pay down the pension debt.
