Boucher questions CCEA study calling for bond release

Article as it appeared in the Norwalk Hour

Sen. Toni Boucher says borrowing more funds can only lead Connecticut to more problems down the road.

Boucher questions CCEA study calling for bond release

WILTON — A study from the Connecticut Center for Economic Analysis released this past month has suggested the state utilize more than $6 billion in unissued bonds to heal its economic woes.

But state Sen. Toni Boucher says borrowing more funds can only lead Connecticut to more problems down the road.

“The state of finances in Connecticut are so dire, so poor,” said Boucher in a phone interview Thursday.

The study released Sept. 18, “Growth Arrested? Bonding, Job Creation and the Health of the Connecticut Economy,” reviews how the state has fallen behind others across the country in economic expansion.

It says the state has had the “worst record of job creation over the past 20 years of any state,” an aging population and large unfunded obligations to employees.

The answer to its troubles may come from taking advantage of its approved, but unissued bonds that reach billions of dollars, according to the study.

“In the face of the continuing struggles of the state’s economy, with job creation weak and unemployment continuing well above the national pattern, it seems anomalous that the Malloy administration has built up a multi-billion dollar stockpile of approved but unissued bonds,” the study said.

Boucher said, though, that releasing the bonds would do more harm than good. She said the state already has some of the highest levels of bonding and debt in America, and that the bonds would only create a larger liability for Connecticut.

“Government doesn’t create jobs, people and the private sector do,” said Boucher, a member of the legislature’s Finance Revenue and Bonding Committee.
On Thursday in a phone interview, CCEA director Fred Carstensen said issuing the bonds would jumpstart construction projects across the state, creating jobs and a larger tax base.

The bonds would also improve transportation systems, airports and higher education institutions, which would draw companies to the state, he said.
“These are the very things that attract businesses and keep people here,” said Carstensen, adding that businesses need dependable transportation for their employees to travel to work.

The report stated an estimated 16,000 to 28,000 jobs would be added to the state’s economy over the next two years if bonds for projects were issued faster.

According to Carstensen, it is difficult to understand why the bonds have not been released.

Carstensen said he did not see any negative impacts from issuing the bonds.
It is true that Connecticut has among the largest bonding obligations in the country, Carstensen said. But, he said, other states seem to have fewer obligations because they have multiple levels of government.

When the obligations of each government level are aggregated in other states, they appear similar to Connecticut’s, he said.

If projects are established from the issuance of bonds, Carstensen said they should come with a plan of execution.

“Every project approved should have a timeline of when it will be initiated and completed,” he said.

Boucher said the state is spending too much as it is, causing businesses to be taxed out and leave the state for others with less costs for staying in business.

“If you really want to stay competitive, you have to bring down the cost on businesses,” she said.

Based at the University of Connecticut’s Storrs campus, the CCEA conducts analyses of Connecticut’s economy in the past, present and future. It employs experts from UConn, state agencies, the private sector and other organizations for its research.

Those intereseted in viewing the CCEA study should visit www.ccea.uconn.edu.