HARTFORD, Conn. (WTNH) -- Already facing a ballooning budget deficit, it appears state government is now having monthly cash-flow problems.
In addition to all his other budget woes the Governor has had to authorize the State Treasurer to seek a half billion dollar line of credit in case the state doesn't have enough money to pay its bills in any given month.
"Money comes into state government in all twelve months but it comes in more rapidly in some months than others. We want to maintain a balance to face any eventuality," Gov. Malloy said.
Malloy says if Congress and the President don't come to an agreement and the country falls off the 'fiscal cliff' there could be a cash flow problem.
But the Republican leaders in the General Assembly note that the Treasurer has had to swap state fund accounts around several times in the past year just to meet monthly bills and say the problem is bigger than Malloy is admitting.
"We are in a dire financial straights, the Governor needs to admit that. Stop covering it up so we can get together and work on a solution," Republican Minority Leader Rep. Larry Cafero said.
"We don't have any money to pay our bills so what Governor Malloy is doing is going out and asking to borrow 550 million dollars so we can pay to keep the lights on," Republican Minority Leader Rep. John McKinney said.
Malloy notes that state government doesn't have any reserves anymore because the entire so-called 'Rainy Day' fund was spent by his predecessor so he has no choice but to do this when the state's cash flow gets low.
"This is short-term borrowing just to make sure that we have sufficient amounts of money in the bank at any given time to meet demand," Malloy said.
This all comes as the Governor's budget staff is preparing huge spending cuts that must be acted upon by the General Assembly before the end of the year.
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Hosed-by-the-system | December 6 2012 12:26pm
this administrations budget was flawed from the get go...."garbage math"....and now we are seeing it..............
OverTaxed | December 6 2012 9:38am
I love how Malloy says he has to do this because his predecessor spent all the money. Really???? The Democrats control everything in this state and had a veto proof majority. How long are people in this state going to fall for this B.S. Let's look at what Malloy has done....increased every conceivable tax but still can't balance the budget or make a dent in the deficit. Why...because he also increased spending, basically giving welfare checks out(earned income credit, UConn health building, what is this bus/train system he wants to build??? What union is he repaying on that one? Medicaid spending through the roof because unemployment is so high. It doesn't help when one enacts anti-business legislation ie: mandatory paid sick time. Give me a break...this guy needs to go but unless the majority of the bozos in the house go with him, nothing will change.
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