State Treasurer Denise Nappier points out in a letter to the Journal Inquirer some important differences between her view on expanded bonding authority and that of Governor Dannel Malloy.
In the course of her
letter, Ms. Nappier shoves a boney finger in the governor’s chest and warns, “… when legislation is enacted that will
result in unnecessary additional costs of issuing state bonds, and may
jeopardize investor confidence in our bonds, it is my duty as state treasurer
to speak out against the measure and urge corrective action."
Mr. Malloy wants
expanded bonding authority for the Connecticut Health and Educational
Facilities Authority. Ms. Nappier wrote
that she had always supported the consolidation of two quasi-public
authorities, the CHEFA and the Connecticut Higher Education Supplemental Loan
Authority, and she heartily agreed with the governor that the consolidation would
enhance efficiency. “However,” she writes, “CHEFA’s new authority to issue
bonds for UConn is unnecessary, costly, and may confuse investors and undermine
their confidence in existing UConn 2000 bonds.”
Apparently, Ms.
Nappier had shared her misgivings with Mr. Malloy to no avail.
The new bill just
signed into law establishing a new bonding process is, Ms. Nappier stresses, “duplicative
of what has been in place for 17 years, and that will surely cost taxpayers
much more than what the treasury, as the public financing arm of the state, has
provided. Higher costs would result from CHEFA’s administrative fees, as well
as likely higher interest costs. Based on comparisons we have done, this new
duplicate process could result in additional expenses of more than $8 million
on a typical $200 million financing.”
The original UConn
2000 program, Ms. Nappier notes, as initially proposed was a 10-year, $1.25
billion venture. However, the program had been extended a few times, ballooning
the cost to $2.5 billion over 23 years. Partnering with the university, Ms.
Nappier’s office has issued almost $1.9 billion in new money bonds to sustain
the program.
Bonding legislation,
Ms. Nappier points out, is exceedingly complex and subject to change. Mr. Malloy and the Democratic dominated
General Assembly, Ms. Nappier asserts, ignored “serious implications for
expanding CHEFA’s bond-issuing authority.
“This begs the
question: Why did the treasury’s attempt to call attention to another
ill-advised and poorly crafted provision to grant CHEFA new authority to see
UConn bonds fall on deaf ears?
“Simply put, when
legislation is enacted that will result in unnecessary additional costs of
issuing state bonds, and may jeopardize investor confidence in our bonds, it is
my duty as state treasurer to speak out against the measure and urge corrective
action.”
Ms. Nappier had
advised Mr. Malloy of the legislation’s shortcomings, which he and legislative gate
keepers in the General Assembly chose to ignore.
In her letter, Ms.
Nappier washes her hands of the predictable consequences: “That the governor
chose to ignore my advice will be at his doorstep.”
Republicans are somewhat
astonished – though delighted -- by Ms. Nappier’s very public quarrel with Mr.
Malloy. Republicans, shooed unceremoniously
out of the room when the governor’s office was hammering out its budget with
Democratic Party leaders and union officials, have yet to suggest that the governor
had loftily ignored the treasurer’s seemingly sound advice because he may have
thought she was a Republican.
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