Connecticut Senate Bill SB00416

Connecticut 2017 Regular Session

• Introduced: 1/19/17
• Refer: 1/19/17
• Refer: 4/20/17

Caption

An Act Limiting The Aggregate Amounts Of General Obligation Bonds That May Be Issued By The State.

Impact

If enacted, SB00416 would impose stricter regulations on the borrowing practices of the state, mandating that the authorization of general obligation bonds by the State Bond Commission does not exceed $2 billion per calendar year. Additionally, the bill restricts the Treasurer from issuing bonds beyond the same cap for fiscal years, which would compel state officials to make more calculated decisions regarding debt management and public financing. The broader ramifications of this may affect funding for public works and other projects reliant on state financing.

Summary

SB00416 is a legislative act aimed at limiting the aggregate amount of general obligation bonds that can be issued by the state. The bill proposes to set a cap on the total amount of state debt to be authorized, specifically that the sum of authorized but unissued bonds and outstanding debt should not exceed 1.6 times the total General Fund tax receipts for the relevant fiscal year. This approach is intended to improve fiscal responsibility and control over state borrowing and public debt.

Sentiment

The sentiment surrounding SB00416 appears to be cautiously supportive among fiscal conservatives who view it as a necessary measure to restore financial discipline and address the state's debt levels. However, there are concerns regarding potential limitations on essential funding for public projects and services, as critics argue that such caps on borrowing could hinder the state's ability to respond effectively to fiscal emergencies or capitalize on economic growth opportunities.

Contention

Notably, the bill has sparked discussion around the balance between safeguarding against excessive state debt and ensuring adequate resources for public infrastructure and services. Proponents assert that limiting bond issuances will ultimately lead to a healthier fiscal environment, while opponents fear that such constraints could restrict long-term investment in necessary state projects. The debate reflects ongoing tensions between fiscal prudence and the need for flexibility in state budgeting practices.