Connecticut Senate Bill SB00337

Connecticut 2010 Regular Session

• Introduced: 2/25/10
• Refer: 2/25/10
• Report Pass: 3/22/10
• Refer: 4/1/10
• Report Pass: 4/8/10
• Refer: 4/21/10
• Report Pass: 4/27/10

Caption

An Act Establishing A Municipal Postemployment Benefit Plan Deficit Funding Bonds Pilot Program.

Impact

The implementation of SB00337 is expected to have a significant impact on the financial management of municipalities, especially those facing challenges related to their postemployment benefit liabilities. By allowing the issuance of bonds specifically for funding these liabilities, the bill seeks to provide municipalities with an alternative method of financing, thereby easing the fiscal burden that arises from previously granted postemployment benefits.

Summary

Substitute Bill No. 337 establishes a pilot program that allows a single municipality with specific characteristics to issue postemployment benefit plan deficit funding bonds. This initiative aims to enable municipalities to address unfunded liabilities associated with postemployment benefits. The bill outlines a structured process for municipalities to apply for the pilot program, ensuring that approved municipalities have the ability to manage their financial obligations through these bonds effectively.

Sentiment

Responses to the bill have generally been supportive, particularly from those who see it as a necessary tool for municipalities to proactively manage their financial health. Proponents argue that it provides a vital mechanism for addressing financial shortfalls related to postemployment benefits, potentially preventing larger financial crises in the future. However, there are concerns regarding the long-term implications of accruing additional debt and the responsibilities that municipalities will face in repaying these bonds.

Contention

Notably, the contention surrounding SB00337 revolves around the appropriateness of allowing municipalities to issue bonds for funding past obligations. Critics express caution about the potential risks of increasing municipal debt without ensuring adequate safeguards or long-term financial plans are in place. The necessity for municipalities to adhere strictly to reporting requirements and actuarial evaluations before issuing these bonds is highlighted as a crucial aspect of the bill to reassure stakeholders of fiscal responsibility.