Following a public letter from State Treasurer Denise Nappier expressing concern over what she views as underbudgeting for bonding costs, Gov. Dannel P. Malloy’s budget chief Benjamin Barnes told her payments will be made on time, regardless of the budget.
“We cannot afford to over-budget your debt service account in order to simply make the year easier for your office,” wrote Barnes, who is secretary of the Office of Policy Management, in a letter Monday.
If Nappier is unable to manage the state’s bonding with the budgeted amount, Barnes said his agency will work with her to find funding for a deficiency appropriation. That may include using revenue from higher-than-expected tax receipts — should that happen — or further rescissions, he said.
Nappier said she was concerned that OPM’s estimated bonding costs for the next two years are approximately $325 million below her own, and that underbudgeting may hurt the state’s standing with investors and ratings agencies.
In a statement released Tuesday just before 12:30 p.m., Nappier said it was her “duty to speak out whenever we may be heading down a path with implications for the management of our state’s debt obligations.”
She expressed displeasure with the developing “tit-for-tat exchange” between her office and the governor’s team, and said Malloy was previously aware of her position on the matter.
