Home Banking & Finance What debt diet? General Assembly approves $4.7B bonding package

What debt diet? General Assembly approves $4.7B bonding package

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Despite Gov. Ned Lamont’s much-ballyhooed “debt diet,” the General Assembly has overwhelmingly approved a two-year, $4.7 billion bond package.

budgetThe bond package, which includes $1.4 billion in general obligation bonds for this fiscal year and $1.64 billion in 2020-21, passed the House by a 126-20 majority and the Senate by a 31-5 vote. Lamont had previously said he wanted to bond no more than $1.3 billion.

As previously reported, passage of the bonding bill also frees up long-delayed municipal aid. The state will borrow $166 million per year for communities, including:

  • $60 million for the Town Aid Road (TAR) grant
  • $30 million for the Local Capital Improvement Program (LoCIP)
  • $76 million for an omnibus Grant for Municipal Projects.

In addition, some $850 million will be borrowed over the next two fiscal years to support municipal school construction and renovation projects, with another $84 million for improvements to municipal water treatment plants.

Other components of the package include:

  • $65 million to renovate the XL Center in Hartford
  • $45 million for a new transit-oriented, quasi-public development agency
  • $40 million for workforce development and other job training efforts
  • $15 million to enhance local school security
  • $5 million for remediation of lead in drinking water at public schools
  • $5 million for various initiatives to mitigate the spread of COVID-19

Despite the bipartisan nature of the General Assembly’s approval of the package – over 50% of Republicans voted in favor of it in both chambers – Senate Minority Leader Len Fasano (R- North Haven) objected to Lamont’s apparent abandonment of his debt diet.

“Gov. Lamont has repeatedly told the public that he was committed to limiting bonding to the core functions of government,” Fasano said. “In February 2019, Gov. Lamont proposed scaling back on bonding authorizations by 40%. The governor laid out a principled goal of prioritizing needs over wants. But that’s not the package before us today.”

The Republican leader further questioned what the impact of all the borrowing would be on credit rating agencies, which had responded favorably to the debt diet Lamont has been promoting.

“The governor sold credit rating agencies a promise that he is failing to keep,” Fasano said. “I am gravely concerned about the consequences of not following through with the representations made.”

Lamont’s communications director, Max Reiss, countered that the State Bond Commission must still approve the legislature’s move before any borrowed funds can be spent. The governor chairs the 10-member bond commission, and his budget office sets its agenda.

“This is not a time for baseless allegations and finger-pointing,” Reiss said, “but it is time for effective governance of this great state and its finances, which will always be measured and balanced with making appropriate investments in Connecticut’s future.”

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