“Enough is Enough” – Fasano, Frantz Statement on Increases in State Bonding

March 17, 2015

Hartford – Senate Minority Leader Len Fasano (R-North Haven) and State Senator L. Scott Frantz (R-Greenwich), Ranking Member of the Finance, Revenue and Bonding Committee, released the following statement regarding the governor’s Bond Commission Meeting today and increases in state bonding. Thus far this year, the governor has allocated $1.48 billion in bonds. The governor indicated during the Bond Commission Meeting that he has a $2.5 billion soft bond cap in mind this year.

“Enough is enough. Connecticut needs to stop this skyrocketing borrowing. The governor bonded over $1.9 billion last year, now this year he’s on track to borrow even more. It’s insane,” said Senator Fasano.

“More bonding today hurts taxpayers tomorrow. While many of the projects being funded are important, we cannot continue on this irresponsible path of simply swiping the state credit card when money is tight.

“More borrowing means more debt and more instability. Connecticut’s growing obligations paired with mounting collective bargaining and employee retirement costs creates a financial environment that is not structurally sustainable. Earlier this month, for the first time in at least the past 14 years, Standard & Poor downgraded the state to a ‘negative’ rating. This downgrade, paired with other low bond ratings and additional downgrades in recent years, shows that Connecticut remains on a downward trajectory.”

Senator Scott Frantz the ranking member on the bond commission added, “I’ll be surprised if the rating agencies don’t raise an eyebrow with respect to the new bonding cap. Yes, interest rates are low but that does not give us good cause to go out and borrow excessive amounts of money. We’ve got to put ourselves on a debt diet.

“At the end of the day the principle needs to be repaid. That puts a lot of pressure on future cash flows, as well as the overall budget. Our debt service is on track to grow in excess of 12% of the overall budget. Interest rates will go up; it is just a question of when?”