Office of Policy and Management Secretary Benjamin Barnes told state Treasurer Denise Nappier Monday that the administration isn’t backing off its position that debt service will be $325 million lower than her estimate.
“We can not afford to over-budget your debt service account in order to simply make the year easier for your office,” Barnes wrote Nappier. “In the event that market conditions change, lowering the demand for higher coupons in new issues during the coming year, or in the event that you are otherwise unable to prudently manage the bond program within the budgeted funds, we will work with you to identify funding to support a deficiency appropriations in the debt service account.”
Like Nappier, Barnes released his letter to the media.
Nappier told Barnes in a letter Friday that the debt service figures in the budget were “too aggressive” and could harm Connecticut’s reputation with investors.
“Budgeting for fixed costs, such as principal and interest on bonds, is a sound fiscal practice, and failure to do so can become a concern for rating agencies and investors alike,” Nappier wrote.
Barnes said regardless of what happens with the budget, debt service payments “will be made on time, in full.”
The one thing both Barnes and Nappier were able to agree upon was that their staff would continue to work on the issue in the future.