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The Day - 2010-02-04

The Day on Proposed Raid of CT's Clean Energy Funds (new window)

Borrowing needed to balance state budget

By Ted Mann

Published 02/05/2010 12:00 AM

State to 'securitize' debt against future revenues

Hartford - Gov. M. Jodi Rell's advisers began their effort to sell state legislators on the Republican governor's $18.9 billion plan for fiscal 2011 Thursday.

In the process, they also began the debate on one detail Rell didn't mention at all in the budget address she gave a day earlier: the $1.3 billion the legislature will have to borrow against the state's future revenues to make this budget balance.

Appearing before the legislature's Appropriations Committee, Robert L. Genuario, the governor's budget chief, faced skeptical questioning from some legislators about the options the administration offered to "securitize" those future revenues.

The securitization plan was a part of the two-year budget agreement passed by Democrats last fall that Rell allowed to become law, and required Genuario and his staff at the Office of Policy and Management to work with state Treasurer Denise Nappier to come up with potential financing schemes that would allow the state to borrow the money to avoid cutting more services or raising taxes in the coming fiscal year.

Rell didn't mention the plan in her address, and no details about it were provided in briefings Wednesday for reporters or legislators. But a copy of the report provided Thursday to legislators shows policymakers leaning toward issuing bonds backed by revenue from an existing state surcharge on electricity bills, or possibly from new revenue that would come from expanded offerings of the Connecticut Lottery, including keno.

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