Bond Commission Disagrees Over Agenda and Casting A Vote; Fitch Downgrades State’s Rating
HARTFORD, CT — (Updated 3:28 p.m.) It was only the second state Bond Commission meeting of the year, but much like the state budget negotiations there were disagreements about almost everything on the agenda, including how members cast their votes. And shortly afterward, the state got some bad news with respect to its bond rating.
The commission approved $351.7 million in borrowing at its meeting Friday morning.
Malloy initially said he planned to borrow $2.7 billion this calendar year but had only put about $245.7 million on the state credit card up to Friday’s Bond Commission meeting. The $351.7 million approved Friday brings the total for the calendar year up to about $597.4 million.
Rep. Chris Davis, R-East Windsor, said he didn’t believe the state should be borrowing $351.7 million when it’s facing a $389.8 million deficit this fiscal year and a $5.1 billion deficit over the next two years.
He said it “just doesn’t make sense to me” to give $3.4 million to the Connecticut Science Center, which is a private, nonprofit organization, as well as over $1 million to a senior center in Willimantic and $5 million to the Mystic Aquarium.
Davis said “right now we just can’t afford to do this.”
Malloy disagreed. He said there are plenty of worthwhile projects, including ones that improve economic development in the state.
Following the meeting, Malloy highlighted the $8.5 million loan the commission approved for SCA Pharmaceuticals, an Arkansas-based company, that has decided to establish a presence in Windsor.
There was also more than $6 million for improvements to the heating and cooling system at York Correctional Institution, the only female prison in the state.
“Are we supposed to allow that facility to deteriorate further?” Malloy asked.
Davis, who is one of two Republicans on the 10-member commission, voted against every item on the agenda. His votes were recorded and announced.
However, his colleague Sen. L. Scott Frantz, R-Greenwich, remained silent when it came to voting.
“My policy is not to waste time by voting no,” Frantz said.
Malloy told Frantz “if you want to go on record as voting no then you gotta vote no.”
Frantz replied, “The clerk knows that I’m a no on pretty much everything.”
The clerk threw up his hands and shook his head to let Malloy know that wasn’t true.
Malloy told Frantz that there’s an audience of people who deserve to know how you’re voting on every item.
“If you want to vote on an item, you have to vote,” Malloy told Frantz.
Frantz maintained his silence throughout the meeting when Malloy called for a vote.
“I would like to stick with my policy that the clerk knows I vote no on everything,” Frantz told Malloy.
The clerk again shook his head.
“If I don’t hear a vote it’s recorded as unanimous,” the clerk said. The votes were recorded as 9-1 in favor on all 41 items on the agenda.
Following the meeting, Malloy joked that “apparently they have different rules in Greenwich.”
Ratings Agency Downgrades Connecticut
Two hours after authorizing the state to go into the market to sell $650 million in general obligation bonds, Fitch Ratings agency downgraded the state’s bond rating from AA- to A+.
According to a press release on its website, Fitch said the reason for the downgrade was “based on reduced expectations for economic and revenue performance over the medium term and the deterioration in Fitch’s assessment of the state’s through-the-cycle fiscal flexibility, which has suffered from the need to address chronic economic and fiscal challenges during a prolonged period of national economic expansion.”
The fact that Connecticut also plans to deplete its Rainy Day Fund to balance the fiscal 2017 budget deficit contributed to the reason for the downgrade.
“Despite a demonstrated commitment to identifying structural solutions to budget shortfalls, the state’s ability to manage is constrained by a comparatively high liability burden that reduces its scope of flexibility,” Fitch said.
Instead of criticizing the downgrade, Senate Republican President Len Fasano, R-North Haven, said Connecticut “must chart a new and different course for Connecticut which is dramatically different from prior years.”
He added: “We have to recognize that what has been put into place in our state has failed and we need to get serious about dramatic structural changes to government to earn back the public’s trust and confidence. It’s about more than rhetoric. We have to act boldly.”
Chris McClure a spokesman for Malloy said the action is “disappointing” and should be taken seriously as they negotiate the next two year budget.
“The only reasonable and responsible course of action is for Connecticut state government to immediately take the necessary steps to mitigate the current year deficit and then balance the biennial budget with recurring measures to reduce spending and structural solutions to our long term problems,” McClure said. “The governor has proposed specific ways to do exactly these things.”