Gov. Dannel P. Malloy’s proposed budget may not contain enough money to pay the state’s debts and interest, State Treasurer Denise Nappier wrote in a letter to the governor on Friday.
The two-year budget’s allotment for debt service is approximately approximately $3.7 billion (see page 18), which is $325 below Nappier’s own estimates — a nearly 8 percent difference.
Nappier said the assumption may be too aggressive, and could hurt the state’s standing among investors and ratings agencies.
“While my office does have a track record of coming in under budget for debt service — due to our careful, prudent management of bond sales, continuation of historically low interest rates and bond premium — the budgeting of potential interest savings before they are realized is equivalent to counting one’s chickens before they hatch,” Nappier said.
