The State Bond Commission is expected to approve $22 million in financing Friday to help a major hedge fund expand operations in Westport, Wilton and Norwalk.
That sparked criticism Tuesday from House Minority Leader Themis Klarides, R-Derby, who called the grant to Westport-based Bridgewater Associates “dubious,” given the state’s fiscal woes.
But Catherine Smith, commissioner of the Department of Economic and Community Development, said these planned expansions would be an economic win for Connecticut.
“With all that has transpired in the last two weeks, with the state’s budget a mess — and unfinished school construction projects hanging — to make the world’s largest hedge fund a priority, I find it dubious,” Klarides said. “Of course we want to keep highly skilled, well-paying jobs in Connecticut. But we all know that other vital projects will not be funded because we have to curtail our borrowing.”
Klarides was referring to a measure that the House of Representatives is expected to approve in special session in the coming weeks to cancel roughly $1 billion in previously approving financing for school construction, capital projects at colleges and universities, and dozens of smaller, community-based projects.
The bill, which the Senate approved earlier this month, is needed to keep Connecticut from exceeding its statutory bond cap — a self-imposed borrowing limit that reflects available revenues.
Two of the four major credit rating agencies on Wall Street downgraded Connecticut’s rating last week, a move likely to mean higher interest costs on future borrowing.
The budget “mess” the minority leader cited involves projections from nonpartisan analysts that raise questions about the long-term stability of state finances. Though the $19.76 billion budget approved recently for 2016-17 does not raise taxes, analysts say that state finances — unless adjusted — are on pace to run $1.3 billion in deficit in 2017-18.
But Smith noted that the renovation and expansion projects would help Bridgewater retain 1,400 jobs and add 750 more. Most of those jobs involve financial analysts and managers, information technology specialists and other highly paid professionals, she said.
And the state grant, coupled with $505.5 million in company funds, would mean $527.5 million would be invested in the projects, sparking significant construction work and other economic activity, Smith added.
The Malloy administration originally had proposed providing Bridgewater with $115 million in state assistance.
The bond commission is scheduled to meet at 10:30 a.m. in Room 1E of the Legislative Office Building.