Just two weeks after raiding the next state budget to balance the current one, Gov. M. Jodi Rell unveiled a plan this afternoon to do the reverse – and thereby replace $1.3 billion in planned securitization with nearly $1 billion in more traditional borrowing.
The odd back-and-forth maneuver still would place new burdens on residents and businesses’ electric bills and divert half of the annual funding used to support thousands of jobs in the energy efficiency industry all to cover debt service on this new borrowing.
The plan, which was presented to legislative leaders in a closed-door meeting earlier today, also calls for creation of a new quasi-public entity to run Bradley International Airport in Windsor Locks. Rell estimates this would produce an extra $25 million in airport revenue starting in 2011-12, which also would be used to pay off the new borrowing.
Rell also said $1 billion in borrowing would be sufficient to replace the $1.3 billion securitization target because new state revenue projections that have increased by about $150 million both this fiscal year and next will cover the rest of the difference.
The governor’s new proposal seeks to eliminate one of the most controversial components of the preliminary, $18.93 billion budget adopted last September for 2010-11. That involved securitizing or selling an estimated $1.8 billion in future revenues at a discount to any investors willing to provide a $1.3 billion payment next fiscal year.
The legislature’s Finance, Revenue and Bonding Committee recommended earlier this month retaining $180 million in soon-to-expire surcharges on Connecticut Light & Power Co. and United Illuminating Customers’ bills to raise $1.8 billion for securitization over the next decade. But Rell vowed to veto that plan, arguing it placed too great of a burden on electricity consumers.
The plan she unveiled today would impose about 40 percent of the burden on electricity consumers that the committee recommended. For CL&P customers, that would involve about $2.37 per month, and for residents and businesses served by UI it would amount to $2.99 per month.
State legislators reacted cautiously to the governor’s proposal, saying they would examine the details and meet with Rell again late today and early Thursday.
“I don’t think it’s a perfect solution. I don’t think there is a perfect solution,” said House Majority Leader Denise W. Merrill, D- Mansfield. “I think it’s a basis for discussion.”