Lamont: Cut back on bonding, to manage debt
Governor Ned Lamont on Tuesday warned that he will be pulling back on big investments in new school construction, as part of an effort to reduce the state’s long-term bonded indebtedness.
In what has become a daily rollout of details to next week’s two-year proposal, Lamont, speaking before the Waterbury Regional Chamber of Commerce, said he wants to cut back on use of the state “credit card,” in order to get a handle on debt.
Lamont wants to decrease state borrowing by 39 percent, amounting to hundreds of billions of dollars from the annual $1.6-billion in debt amassed under Gov. Dannel P. Malloy. Lamont’s target is to save $2 billion over the next 10 years. He wants to cut bond authorizations, through the State Bond Commission, which he controls, by $600 million a year, with an annual debt ceiling of $960 per year.
That should put a squeeze on new school construction, which makes up a bulk of annual capital projects.
“The state has had a problem putting costs on Connecticut’s credit card that it simply can’t afford to pay,” Lamont told the chamber breakfast. “As we get ready to release a budget that will reshape and stabilize Connecticut’s financial future, it is essential we look at our state’s borrowing and how the size of those future debt service costs will pile onto existing obligations - impacting our future, and our children’s. To trim costs down the road, we have to reduce our bloated capital spending starting right now.”
Lamont does not intend to halt any school projects under construction under his “debt diet” plan. Nor will he scale back major infrastructure and transportation projects. He has canceled the January and February meetings of the bond commission as part of his plan to limit the panel’s agendas to “critical needs only.”
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