Connecticut Attorney General George Jepsen on Wednesday issued a formal opinion saying a mistake in a June bond sale covenant will not impact the state’s ability to borrow over the $1.9 billion bond cap.
Connecticut spent more money than it took in for 10 out of 13 years, according to a long-term state analysis by Pew Charitable Trusts. Overall, Connecticut was one of only eleven states that were consistently in the red because they “carried forward deferred costs of past services, including debt and unfunded public employee retirement liabilities, which could constrain their future fiscal options,” the report said.
In 2016 Connecticut borrowed $327.4 million for public projects, which included $4 million in fees for Connecticut agencies to oversee the projects, essentially borrowing to pay the cost of its employees. Those fees have added up to more than $61 million since 1999. Each year the state pays interest on these costs.
Connecticut cut $1 billion from its planned borrowing this year in response to lowered tax revenue but is still moving forward with a massive project to update the state office building at 165 Capitol Avenue. Among the projects and grants-in-aid that didn’t make the bonding cut was $4.5 million for repairs and alterations to group homes and residential facilities with the Department of Children and Families.
Connecticut officials are set to approve $78 million of borrowing Friday to pay for new and improved affordable housing with unit prices reaching as high as $249,000 for apartments in Norfolk. Gov. Dannel Malloy announced the projects Wednesday. The State Bond Commission, controlled by the administration, will vote on the projects Friday. The administration announced the plan as part of its drive to create quality, affordable housing to spur economic growth and investment in the state.