11/05/07 - Delay in bond package cost the state $2M

State Of CT News

Delay in bond package cost the state $2M

By Brian Lockhart
Greenwich Time

The months-long debate among state lawmakers and the governor over a two-year borrowing package ate up more than newspaper columns and airtime on radio and television newscasts.
It cost taxpayers about $2 million.

Stamford, Norwalk, Greenwich and other municipalities welcomed the bond package passed Tuesday. But the lack of a bond package has interrupted the flow of state grants for school construction since summer.

The fiscal year began July 1, but it was late September before the General Assembly's Democratic majority passed a $4.6 billion borrowing plan. Republican Gov. M. Jodi Rell vetoed it in early October, saying it was too expensive.

To make amends for the long delay, the General Assembly and Rell estimated how much municipalities lost in interest payments and pledged to provide compensation. The result was adding $2 million to the final package.

Some towns were forced to seek 'expensive short-term loans' to keep projects moving forward while the bond bill was in limbo, Rell said.

Others, such as Norwalk and Greenwich, covered the costs in their budgets but lost interest that would have accrued.

'The Connecticut Conference of Municipalities were really the ones who brought this to light,' said its spokesman, Kevin Maloney. 'The money had been promised to towns, and they budgeted on that basis.'

State budget director Robert Genuario of Norwalk said municipalities seeking the interest reimbursement must file an application with the state Department of Education for verification.

According to Norwalk's Finance Department, the city lost $18,000 in interest income based on the more than $3 million it spent to make up for the late school construction payments.

Greenwich's comptroller estimated his town is owed $6,500 in addition to the $754,000 it is due for school projects.

In Stamford, $5.4 million in school construction grants were delayed. The amount of lost interest was not immediately available.

Genuario acknowledged it was a rare step for the state to take, but he said he thinks it's fair. It is possible the figure will be less than $2 million, he said.

The legislature ultimately cut $400 million from the $4.6 billion bond package Rell vetoed.

The $2 million could have covered small reductions in municipal funding requests statewide, including the following projects: * Flood control in Norwalk: The original bond package borrowed $3.2 million, which was reduced to $3 million.

Original Greenwich Time article: Delay in bond package cost the state $2M