Republican leaders in the Connecticut General Assembly expressed concern Tuesday that the state’s cash reserves are running low and officials are relying on money earmarked for other projects to pay the bills, The Associated Press reports.
Rep. Vincent Candelora, ranking Republican on the Legislature’s finance committee and a member of the State Bond Commission, voted against various projects during Tuesday’s commission meeting, saying he’s concerned the state is potentially using bond funds to operate the government.
“It is not transparent to what extent we are borrowing from our capital project reserves in order to fund government,” he said.
Gov. M. Jodi Rell, a fellow Republican, said she has been assured by the state treasurer’s office that the state does not have a cash flow problem. Also, House Speaker Christopher Donovan, D-Meriden, said it’s not usual for the state’s spending to ebb and flow depending on when revenue is taken in.
Donovan said state revenue estimates actually appear to be improving. A report from Rell’s budget office is due Friday.
“You pay certain bills at certain times. That’s the treasurer’s job. The treasurer assured us that everything is going fine. It’s not dire straits. And we’re paying our bills and we’re moving on.”
Candelora said he was alarmed by a memo he had received from State Treasurer Denise Nappier, dated Aug. 9, that mentioned how the state’s estimates for cash flow assumed $520 million in general obligation bonds would be issued this fall. Without that borrowing, Nappier said in her letter that Connecticut would have about $600 million in cash in December, just over one week’s worth of overall state expenditures.
“Bond fund proceeds may be temporarily borrowed to fund other expenditures for short periods of time but must be repaid so they are available for expenditure on capital projects,” Nappier wrote in her letter to Candelora.
Conversely, Nappier said, the state’s common cash pool covers capital expenditures until the bonds are sold.
“This practice is how the state has historically managed its cash and debt programs,” Nappier wrote in the same letter.
At Tuesday’s meeting, the commission, which is chaired by Rell, approved $260 million to help pay for the improvements needed for high-speed trains to run through Connecticut and western Massachusetts.
The $260 million is Connecticut’s matching portion for a $220 million federal grant being sought. The state filed its application Aug. 6.
The money will cover station upgrades, new stations and pay to add tracks the remaining 25 miles of the 62-mile line to allow trains to pass one another. Officials hope to bring high-speed, intercity rail service within five years.
Commission members held off from approving $86.3 million funds needed to purchase 380 new self-propelled rail cars for the Metro North and Shoreline East rail lines. Rell said she expects that funding to be approved at a future meeting.
