CONNECTICUT
When the Alice Peck School in Hamden got a new roof, it pointed out an important culprit in the state's persistent fiscal problems, accordint to Rep. Ronald Smoko, R-Hampden.
Rep. Smoko said in a recent press release that the tab for the $2.65 million roof repair escalated to $6.6 million because of unnecessary debt service on bonds.
Not only did Hamden borrow, but the state, which reimbursed 53% of the project's cost, also issued debt to meet its share.
Under what Rep. Smoko called a "new and poorly understood" revision to the state's school construction reimbursement policy, the state now issues bonds to cover not only its share of the principal, but also the interest.
Until the last two fiscal years, the state drew on current revenues for the interest portion.
Now, according to Rep. Smoko, the state has taken its policy of borrowing for the program "to a new" and "ill-advised" level. "We are now borrowing money to pay back what we have already borrowed."
The Connecticut General Assembly made the change to lighten the state's obligations to the school reconstruction program, for which it authorized about $148 million in debt this fiscal year, according to the Connecticut Policy and Economic Council.
Bonding out principal and local bond interest payments is "a flawed policy that exacerbates the fiscal dilemmas that we have been facing," Rep. Smoko said in an interview.
A spokesman for Gov. Lowell Weicker could not be reached for comment.
