When the State Bond Commission met Thursday, they considered the plan to issue $275-million in bonds in March, in order to fund this year’s capital outlay projects.
But the author of this year’s Capital Outlay bill expressed reservations about the deal.
“We have anywhere between 4 and 5 times more projects that have been approved for cash this year than we have money for,” said House Ways and Means chairman Neil Abramson.
He’s now concerned about this year’s budget shortfall, as well as the next budget they’ll be working on this spring.
“Every dollar that we borrow here is required to be paid back out of State General Fund, which then comes out of the operating budget, which means somebody else – somewhere else – doesn’t get the revenue that they think they’re getting,” Abramson said.
He suggested they reduce the total amount to be borrowed, delaying work on some $127-million in deferred maintenance projects for colleges.
“It’s $19.5 million in additional State General Fund that we’ll have to pay to pay this money back. So, that money – is it coming out of higher education? Is it coming out of health care? Where is it coming from? Does higher education know about this, because we’re paying to fix up their buildings, but do they know that may mean they’re going to take a cut in operating costs?”
By waiting to borrow those funds till after the start of the next fiscal year in July, he said it would push the start of repayment into the following fiscal year.
“If we’re able to manage until the fall, it pushes our debt service for that into Fiscal Year ‘19.”
But state financial advisor Renee Boicourt reminded Abramson that‘s when temporary taxes expire.
“There’s this cliff in revenues and therefore debt capacity in Fiscal ‘19,” Boicourt said.
The Bond Commission ultimately decided to postpone action till next month. In the meantime, they’ll discuss options.