Bond Commission Gets Close To Malloy’s Self-Imposed Cap
Posted to: Business, Economic Development, State Budget, Taxes, State Capitol, East Hartford, Manchester, Meriden, Middletown, New Haven, Stamford, Trumbull
The state Bond Commission is poised to put another $93.7 million on the state credit card next week when it meets to approve a number of projects. The borrowing will bring it within $8.7 million of Gov. Dannel P. Malloy’s self-imposed, $2.5 billion bond cap for the year.
Malloy told the three credit rating agencies in February that he’s increasing the amount of annual borrowing the state plans to do this calendar year to $2.5 billion. Over the past two years Malloy, who controls the Bond Commission’s agenda, set a “soft” $1.8 billion bonding cap. He exceeded that cap last year by about $170 million.
In March, Malloy told Republican lawmakers that setting a $2.5 billion cap doesn’t mean the state won’t exceed that amount if it’s necessary. There are still two Bond Commission meetings scheduled before the end of the year.
Sen. Scott Frantz, R-Greenwich, said Wednesday that the state continues to borrow at “too fast a rate.” He said he gets that interest rates are low, but the state still has to pay back the principal on these bonds.
He said every year, for the last eight years, the amount of borrowing the state does continues to increase and at some point that money will have to be paid back. That means a larger portion of the general operating budget will have to go toward debt service and less money will be available to fund services.
“It’s hard to cut back on borrowing,” Frantz said.
If the state borrows $2.5 billion, it will be the most money the state has ever borrowed in a single year. The 10-member commission headed by Malloy will meet Tuesday, Sept. 29 to approve the borrowing.
As part of its agenda next Tuesday, the Bond Commission is expected to award $7 million for the purchase of more buses to expand CTfastrak service to East Hartford and Manchester. The buses would use the High Occupancy Vehicle (HOV) lanes on I-84 east of the Connecticut River. The route will be an extension of the 9.4-mile dedicated busway between Hartford and New Britain.
The state also will loan $1 million to MC Credit Partners LP to help them relocate from New York to Stamford and create 21 jobs. According to the Bond Commission agenda, the loan will have a 2 percent interest rate for 10 years and the company will be eligible to have $250,000 of the loan forgiven if it creates 21 jobs and retains them for two years. The company will have another $250,000 forgiven if it creates five additional jobs and retains them for two years.
The state also will loan Vermillion Inc. of Austin, Texas $2 million to move to Trumbull. The loan will have an interest rate of 2 percent for 10 years. And the company will have $2 million of it forgiven if it creates 40 jobs and retains them for two years. The company will be eligible for an additional $1 million loan upon FDA approval of its new product and a further $1 million loan when it achieves annual revenue targets.
Malloy’s transportation initiative will receive $17.5 million for various bike and pedestrian trail connections, including a dedicated, protected cycle track from downtown New Haven to the residential neighborhoods to the west of the city and Southern Connecticut State University.
There’s also $67,000 for security improvements at the Connecticut Juvenile Training School, $514,000 for improvements to Rentschler Field in East Hartford, $37 million to renovate Lafayette Hall at Housatonic Community College, $700,000 to fund additional costs associated with the state’s share of the development of a parking garage near the rail station in Meriden, and $300,000 for the Tennis Foundation of Connecticut to help design improvements to the Connecticut Tennis Center in New Haven.