00:00Connecticut transferring about $1.3 billion in excess revenue this latest fiscal year to underfunded state employees and teachers' pensions.
00:07Bloomberg's Martin Braun has been covering this and joins us now.
00:10So why is Connecticut channeling so much money to its pensions?
00:15Well, you know, Connecticut used to be mentioned, its pensions used to be mentioned in the same breath as New
00:21Jersey and Illinois and Kentucky,
00:23which, you know, are in really bad shape. But in the last few years, the state has been channeling extra
00:30revenue from its personal income tax and capital gains tax into its pension funds.
00:37So its funding has really improved, and that's helped improve its credit rating.
00:41Where has the extra money come from? Because you said not so long ago it's spoken in the same breath
00:46as New Jersey.
00:47Well, it's coming from, you know, Wall Street's been having great years.
00:51It's coming from all these capital gains taxes, bonuses, bonus tax revenue.
00:56And contrast to other states, which tend to spend most of their revenue, Connecticut has really targeted extra what it's
01:06collecting into its pensions.
01:07So it's been more conservative in that respect.
01:11You mentioned the credit rating for Connecticut. Where does it stand right now, and how is this latest move likely
01:17to affect the credit rating?
01:19Well, the credit rating was raised last year. It's like AA. It's a AA rating, which is third highest.
01:30And, you know, that's really been based on the improvements the state has made in terms of budgeting and its
01:35pension funding.
01:36So I don't know that there's going to be more upgrades in the cards, you know, soon.
01:44But it's, you know, Ned Lamont, the governor, is running for re-election, so maybe he can run on the
01:50pension funding status.
01:52Is that something that wins votes?
01:54I don't know. Maybe. Maybe some muni investors.
01:57This might be an unanswerable question, but do we anticipate that Connecticut will be able to achieve surplus deposits again
02:03to the state pension funds?
02:05Is this a one-time thing?
02:06No, no. This has been, it has, depending on the revenue collection.
02:10So if Wall Street has, you know, they've been having a great year this year.
02:13If it continues, there will be more deposits into the pension fund, just good for the public employees.
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