HARTFORD, CT — State Treasurer Shawn Wooden sent a letter to the governor and legislative leaders Tuesday to tell them he’s concerned the Senate Republican transportation plan could negatively impact an upcoming bond sale.
Wooden said he’s concerned about the amount of money the Senate Republican plan, which doesn’t include tolls, takes from the Rainy Day Fund, which is also known as the Budget Reserve Fund.
The Senate Republican plan would use the Rainy Day Fund to pay unfunded pension liabilities that are part of the Special Transportation Fund.
“If enacted in its current form, the effects of the drawdown proposal will be immediate. My office is preparing to bring two significant bond offerings to the market in the coming weeks; one for General Obligation purposes, and the other for transportation,” Wooden wrote. “Our investment bankers have advised us that such a drawdown is likely to have a negative impact on investors’ confidence resulting in potentially higher interest rates for Connecticut taxpayers.”
Senate Republican Leader Len Fasano, R-North Haven, said Wooden’s letter came before the two could even meet to discuss the proposal.
“I called the treasurer on Monday and we spoke about setting up a meeting so he could review our plan and better understand the STF solvency issues the state is facing,” Fasano said. “A day later I receive this letter that makes false assumptions and jumps to conclusions.”
He said when investors look at the state actions they must look at the whole picture.
“I have no idea what the Treasurer presented and to whom because he has not even met with me yet to review the Senate Republican plan. What numbers did he show? Who did he talk to? What analysis did he provide? What projections did he have available? Did he ask his investment bankers to consider what would happen if nothing is done as the STF is headed for insolvency which is already jeopardizing federal reimbursements?”
Wooden said he has concerns about discounting Special Transportation Obligation bonding too, which “could threaten federal grant funding, as we may no longer be able to provide the required match of twenty percent state funds.”
There are now three proposals on the table to improve transportation in Connecticut.
Gov. Ned Lamont’s plan is 10 years, and $21 billion. It includes 14 toll locations. The toll money is used to secure low-interest loans from the federal government.
The Senate Republican plan is a 10-year, $18-billion plan that uses the money from paying down the equity on special transportation obligation bonds, $100 million in general obligation bonds, and the new car sales tax as revenue streams to access the low-interest loans from the U.S. Department of Transportation’s Build America Bureau.
The House Democratic plan eliminates tolling on passenger vehicles and would permanently install truck-only tolls in 12 locations.
Lamont said Wednesday that the problem isn’t with the number of plans. “The problem is getting these people to make a tough vote to get this state moving again,” Lamont said. “That’s what I’ve got to do.”
“Right now Senate Republicans have a plan House Democrats have a plan, I have a plan, how many more do you want?” Lamont said Wednesday morning.
Senate Democratic leaders who tossed cold water on Lamont’s 14 toll location proposal aren’t going to offer their own counterproposal. House Republicans are still contemplating whether putting forward a plan without tolls would get the consideration it deserves.
Lamont said they are still waiting for plans from those two caucuses.
Senate President Martin Looney, D-New Haven, said “now is the time for us to all gather together.”
“I think the time has come for all four caucuses to meet with the governor and try to find common ground,” Looney said.
He said he remains hopeful the legislature will be able to vote on something in the month of January.
Asked if he was surprised at how quickly the opposition to his proposal was mounted, Lamont said “The legislature has spent the last 30 years avoiding making a decision on how we get this economy growing again and how we fix transportation. Was I shocked that they wanted to put it off a little bit longer? No.”
The problem isn’t with the number of plans. “The problem is getting these people to make a tough vote to get this state moving again,” Lamont said. “That’s what I’ve got to do.”
“My job is to get people to yes,” Lamont said. “My job is to be able to reach a solution.”
Fasano said Lamont is dragging his feet on getting a meeting scheduled.
“The governor’s efforts to get leaders together are moving at a snail’s pace,” Fasano said. “If legislative leaders are not willing to make their schedules flexible, there is no chance we will be voting on any transportation plan before the next legislative session. Every day we delay means further damage to our state. The Special Transportation Fund’s solvency is in question.”