As fixed costs continue to cripple Connecticut’s budget, lawmakers from both sides are voicing the need for a hard limit on state borrowing.
Republicans have been calling for a statutory limit on bonding for some time, but at least 35 House Democrats have also co-sponsored a bill this session.
“We need to look at how we do business as a state, and how we provide our services and do our budget in a much different way,” said Rep. Cathy Abercrombie, D-Meriden.
The legislature’s nonpartisan Office of Fiscal Analysis reported in its annual Fiscal Accountability Report, released in November, that debt service will grow from 10 percent of the General Fund budget in fiscal year 2015 to 13 percent in fiscal year 2020. It also said borrowing supported by the General Fund has grown by 72 percent since fiscal year 2007.
All fixed costs combined are now projected to account for half of next year’s budget.
The governor, as chairman of the State Bond Commission, already sets a self-imposed “soft cap” for total general obligation bonds, those paid for via the General Fund budget, in a calendar year. Gov. Dannel P. Malloy said after Wednesday’s meeting, the first of the year, that he would maintain the $2.7 billion cap he set last year.
Sen. Joe Markley, R-Southington, said the General Assembly needs to set a firmer amount.
“These kinds of caps are what we’re forced to do because people aren’t behaving responsibly,” he said.
Republicans have proposed bond caps annually, even pitching them as amendments to other bills to try to force votes, but House Speaker Joe Aresimowicz, D-Berlin, said in a statement his caucus also wants to ensure “tax dollars are spent as efficiently as possible.”
“By limiting future bonding to projects that encourage economic development or educational outcomes, taxpayers will benefit for years to come and our economy will continue to grow,” he said.
Chris McClure, a spokesman for Malloy’s budget office, said the governor looks forward to “working with leadership to form a workable solution” if lawmakers are intent on passing a bond cap.
“At present, we work within an existing cap and the confines of the enacted bonding bill each fiscal year,” McClure also said. “If the legislature would like to restrict itself further, we won’t stand in their way.”
Malloy has routinely responded to calls for a bond cap by saying lawmakers send too many projects to the commission, and is especially critical of Republicans who also celebrate projects that receive funding.
Senate Republican Leader Len Fasano, R-North Haven, said the criticism isn’t fair, though, because lawmakers are simply advocating for their projects when including them in the bonding package, and Malloy could authorize borrowing for fewer projects.
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