Bond Commission Approves $575.5M
The state Bond Commission approved about $575.5 million in borrowing Friday for school construction, road and bridge repairs, rail improvements, and business development.
One of the biggest projects the state agreed to put on its credit card include improvements to the Metro-North railroad bridge and parking facility at the Stamford Transportation Center. The commission also funded $57 million in resurfacing for 200 miles of roads and $280 million in school construction projects.
Gov. Dannel P. Malloy said the state plans on bonding about $1.8 billion this year. In recent years the state has bonded about $1.4 billion.
“I can’t imagine that we would exceed $1.8 [billion], but we may be substantially less than that,” Malloy said.
The amount of money the state bonds is closely watched by the three credit rating agencies. The state met with one of the credit rating agencies within the last two weeks and Malloy expressed confidence the state is in a good position.
State Treasurer Denise Nappier said the state’s credit rating remains stable and “we have every hope it will continue to remain stable.”
Last year, at this time Moody’s Investor Services downgraded Connecticut’s bonds, citing poorly funded pensions and the lack of a rainy day fund. However, earlier this month Nappier told lawmakers that she did take the precautionary step of getting a $300 million standby line of credit on Dec. 14. According to the Jan. 2 report, the line of credit had not been drawn upon.
Only one of the 10 members voted against two of the 47 items on Friday’s agenda.
Rep. Sean Williams, R-Watertown, said he voted against the $7 million bond allocation for state assistance to Bridgewater Associates, a hedge fund that wants to move its headquarters from Westport to Stamford, because he doesn’t believe that’s how the state should be using taxpayer money.
“I do not think that state government should be in a position to be serving as a bank for businesses, especially those large businesses that could go into the private market and get financing on their own,” Williams said. “We are tying up valuable state capital.”
The hedge fund manages $130 billion in assets, has 1,225 employees, and will be receiving a $25 million forgivable loan and up to $80 million in urban renewal credits from the state to build a new corporate headquarters and create 1,000 jobs within 10 years.
Williams said he doesn’t doubt the governor’s desire to improve the state’s economy and business growth, “we just have two separate visions as to how that should happen.”
The two also don’t seem to share the same opinion about whether to continue a tax beyond its sunset date.
There are at least two big taxes set to expire this year, including the 20 percent corporate surcharge tax and the tax on electric generators. They are scheduled to expire on July 1, 2013.
Malloy was asked if he thought continuing any taxes beyond their sunset date counts as a “tax increase.” The answer: “No.”
“I would not consider continuing existing taxes as raising taxes,” Malloy said.
Asked if that’s what he was considering as he prepares his budget, “I’m not eliminating that possibility.”
Williams disagrees. “I think if state government said that the tax should sunset, it should sunset.”
He said the state has a long history of making promises it could not keep. He said he thinks people lost confidence in the legislature when it says it’s going to do one thing, then does another.