Democratic Gov. Dannel P. Malloy announced he will increase the amount of borrowing the state does this year to $2.7 billion.
Malloy made that announcement following Thursday’s state Bond Commission meeting where the commission approved $728.4 million in general obligation bonds. That amount brings this year’s total up to $1.23 billion after only two meetings.
Last year, the state fell about $5,000 short of borrowing $2.5 billion, which is the most the state has ever borrowed in a single year.
Republican lawmakers have repeatedly criticized the amount of borrowing the Malloy administration has been doing over the past three years. Under Malloy, Connecticut’s borrowing has increased from $1.4 billion in 2011 to $1.8 billion in 2013, $1.96 billion in 2014, and $2.5 billion in 2015.
Malloy encouraged the two Republican lawmakers on the Bond Commission to vote against the projects on the agenda, if they don’t support them. However, Malloy pointed out that the two Republicans, Rep. Chris Davis, R-East Windsor, and Sen. L. Scott Frantz, R-Greenwich, vote in favor of 95 percent of the projects.
Davis voted against a few items Thursday, but Frantz voted for all of them. Frantz said his silence should not be misinterpreted as support for the items.
“There’s no one in this audience that thinks you voted against these things,” Malloy told Frantz. “That’s only in your mind that you’ve constructed that interpretation.”
Frantz said he’s concerned about the amount of borrowing the state is doing when three of the four Wall Street rating agencies have a “negative outlook” of Connecticut’s bonds.
“We just sold $500 million worth of debt at 3.07 percent,” Malloy said.
He argued that with these types of low interest rates, the state should be borrowing.
“If Republicans don’t want to spend a lot of money then let’s stop reimbursing communities that are relatively wealthy for school construction,” Malloy said.
The state Bond Commission approved $500 million in school construction projects Thursday, but none of that counts toward the $2.7 billion general obligation bond cap that’s the focal point of the Republican argument.
“We need to spend money on things that are important,” Malloy said citing housing and bridges and schools as worthy projects.
Rep. Vincent Candelora, R-North Branford, said Malloy can’t have it both ways either. He said he can’t be canceling debt on the backend and continue to bond at “unprecedented levels.”
Malloy proposed canceling $385 million in bonds as part of his Feb. 3 budget proposal to the General Assembly.
The governor said Republican lawmakers are hypocritical in their criticism of the the borrowing because they routinely show up at ribbon cutting ceremonies for projects they never supported.
“Republicans have not voted for almost all of the bonding, but they all show up when there’s a ribbon to be cut,” Malloy said, in reference to the rank-and-file Republican who vote against the omnibus bond packages in the General Assembly. “Or they all show up to put the shovel in the ground. So if they really mean this . . . they shouldn’t show up for the ribbon cutting because you really can’t have it both ways.”
Candelora, who previously sat on the state Bond Commission, said it’s absolutely not hypocritical for Republicans to show up at the ribbon cuttings for these projects, even though they didn’t support them.
“There are projects that are important to our districts and we’re going to advocate for them,” Candelora said.
Candelora said the state needs to reduce the amount of money it’s borrowing, but the governor doesn’t seem willing to have a conversation about that.
Some rank-and-file Democratic lawmakers and union leaders believe the state could pare back some of its borrowing and spend what would otherwise be debt service on maintaining core government services, while focusing more on raising revenue from the wealthy to avoid laying off state employees.