Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the School Construction topic
No spam. Unsubscribe anytime.
Administration urges caution on new school-construction bonding language, flags credit and prefunding concerns
Summary
The Agency of Administration told the House Ways & Means Committee that authorizing additional general obligation borrowing in H.955 without CADC/SEAC review or detailed fiscal analysis could affect credit ratings, and recommended coordination or alternative models for debt assistance.
Nick Kramer, chief operating officer at the Agency of Administration, told the committee that there is no single, objective "bonding capacity" number and cautioned against naming a specific additional bonding amount in statute without CADC (Capital Debt Affordability Committee) review and analysis.
"There is no magic number for bonding capacity... it's whatever you can afford," Kramer said, summarizing CADC’s role in producing a recommendation on prudent bonding levels. He warned that specifying another $50 million in statute—an approach discussed in committee draft language—could have unforeseen impacts on the state's credit rating and the state's fiscal discipline unless coordinated with CADC and other financial advisers.
Kramer described the administration’s preference for exploring alternatives (including a Rhode Island-like model in which the state provides debt service assistance while local entities issue bonds) and highlighted a prefunding cash-fund approach the administration has advocated that lowers lifetime project costs by prepaying rather than borrowing. He said the state's current debt-service trajectory (debt payments exceeding new borrowing in recent years) factors into affordability and rating considerations.
He asked the committee not to "call out a number in the bill" and offered to provide alternative statutory language and to work with treasurer and CADC to align any program with rating-agency expectations. Committee members pressed for workable options; Kramer agreed to follow up with suggested language and cautioned that rollout and membership decisions for any new school-construction mechanism would require more work than available in a one-day amendment process.
Kramer’s testimony followed tax and education department comments and preceded additional committee deliberations and staff-led drafting.
