The state Bond Commission approved Gov. M. Jodi Rell's request for $260 million to help fund the planned New Haven-to-Springfield commuter rail line today.
But the approval only came after two of the governor's fellow Republicans opposed it to protest a Rell-approved plan to borrow $580 million in 2009 from future capital projects to help government pay its bills.
Rep. Vincent J. Candelora of North Branford, ranking House Republican on the Finance, Revenue and Bonding Committee, questioned last week why the $580 million in short-term borrowing - approved in April 2009 when the state was more than $1 billion in deficit - still hasn't been repaid. He also charged that he was unaware at the time that the financing had been sought to keep the state's checkbook in balance, and not to finance capital projects.
Candelora and his fellow GOP lawmakers already have criticized both Rell, a Republican, and the legislature's Democratic majority for ordering $2 billion in total borrowing over the past year to cover government operating costs across two annual budgets.
"We're borrowing from our bond projects for the purpose of operating government," Candelora said during the commission meeting, questioning whether it would restrict available funding for capital projects in the future.
"It does raise questions on the part of the legislation as to whether it was intended to cover borrowing ... of that duration," added Sen. Andrew W. Roraback of Goshen, ranking GOP senator on the finance panel and also a member of the commission.
State Treasurer Denise L. Nappier, who developed the 2009 borrowing plan, said it enabled Connecticut to borrow cash at low -interest rates, and added that after the notes are repaid in 2011, the state's capital project budget will be restored.
Rell initially tried after the meeting to refer reporters' questions about the state's operating cash pool to Nappier.
But when pressed, Rell said Candelora's points "were well taken."
Rep. Cameron C. Staples, D-New Haven, co-chairman of the finance committee and also a bond commission member, said disputes of this kind might be avoided in the future if the commission were to receive regular reports on the cash pool.
"regular reports on the cash pool?"? good lord.
the state has borrowed short-term cash for years to pay bills when income was out of sync with outgo. they used to be called tax anticipation notes. i don't know if the treasurer still does that, but there's no ethical difference between that and dipping into capital project money available in the cash pool. if Nappier has found a cheaper way to solve the cash-flow problem, she should be praised, not criticized.
Short term borrowing to meet cash flow needs is common and acceptable, and Denise Nappier does a superb job in getting it done cheaply.
What's not acceptable is hiding the transaction from those in the legislature who also have to approve it. There is a 20-year history of Republican governors not sharing critical data with the legislature, and now that Rell is leaving even her own party is beginning to wake up and criticize her for it.
Hartford is dysfunctional. Thankfully in January there will be a lot of new faces in the government, and hopefully they
Read MoreThe detailed response provided to Rep Candelora and the OFA questions show very clearly that the state is in dire financial straits. While it is normal to borrow short term in anticipation of impending tax receipts (tax anticipation notes), or to place bond funds temporarily in the cash account, it is not normal to take funds borrowed for capital projects and use those funds for years for working capital.
The effect of this reckless practice is to create the illusion that the state is solvent when it is on the verge of financial collapse. Also, because so much of the
Read More"Today's announcement won't change the fact that women's rights are under assault in Washington."
U.S. Rep. Chris Murphy, reacting to President Obama's contraceptive compromise
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When: Connecticut's Republican presidential primary is April 24, the same day as Rhode Island, New York, Pennsylvania and Delaware.
Who: It is a closed primary, meaning Republicans only. Noon on April 23 is the deadline for new or unaffiliated voters to register as a Republican.
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