A bill to cancel more than $420 million in planned state government borrowing, including funds for dozens of small projects in state legislators’ home districts, is now on its way to Gov. M. Jodi Rell’s desk.
The House of Representatives voted 145-0 Saturday to adopt the measure, which passed unanimously in the Senate on Friday and is designed to keep Connecticut from exceeding the statutory limit on its credit card next fiscal year.
The bill also reduces bond authorizations for tourism programs, open space preservation and park improvements, energy efficiency projects, renovations to prisons and other state buildings and a host of economic development programs.
The $422 million reduction represents a 22 percent decrease in planned borrowing involving the sale of state bonds. All bonding given preliminary approval by the legislature also must be endorsed by the State Bond Commission, a 10-member panel chaired by the governor and comprised of other administration officials and constitutional officers as well as leaders of the legislature’s Finance, Revenue and Bonding Committee.
To help Connecticut’s three largest cities deal with a 15 percent reduction in bonding for their local projects, the bill places the remaining $58.6 million into undefined funding pools and allows municipal leaders in Bridgeport, Hartford and New Haven to distribute the resources among projects in their respective communities.
“That is the first time, as far as I can remember, we have ever done anything of this nature,” Rep. Carlo Leone, D-Stamford, co-chairman of the finance committee’s bonding subcommittee.
Despite recent signs of revenue growth, state tax revenues remain below the levels they stood at when the last recession began two years ago. The statutory debt limit, which covers both borrowed funds and bonding given preliminary approval, shrinks when tax revenues decline.
State government is on pace to exceed its bonding limit next fiscal year by $242 million, but reductions in this bill would leave Connecticut about $180 million under the cap.
“We can communicate to the markets we have control over our borrowing, that we have fiscal discipline,” Leone said.