(Reuters) – Connecticut could raise $1.3 billion for its new budget by securitizing various assets, including state charges on utility bills and lottery revenues, the treasurer said in a report issued on Wednesday.
Treasurer Denise Nappier, who worked with Secretary of Policy and Management Robert Genuario on the report, said securitizing tobacco revenues from the settlement between cigarette-makers and U.S. states likely would cost too much.
They also ruled out: securitizing the money from new fees or taxes or highway tolls; debt issuance backed by personal income, sales, or casino taxes; issuing debt backed by revenues from the personal income, sales or casino taxes; and selling securities to the state pension fund or borrowing from it.
Another option, selling “major” state assets, likely would take too long and it would be difficult to determine whether the state was being offered attractive prices in the current markets, the report said.
Connecticut is not a stranger to the kinds of privatizations that other states have undertaken. Governor Jodi Rell signed a 35-year deal to upgrade service plazas along major highways with private equity group The Carlyle Group [CYL.UL] in November. For details, please click on: [ID:nN19197505].
Connecticut previously issued rate replacement bonds, the report said. The new proposal would redirect about 37 percent of the revenue the state already gets from charges on electric bills of the state’s two major utilities “in a manner that will not increase current electric rates to our customers,” the report said.
Lottery bonds could tap increasing revenues gained by increasing marketing and adding games, it said. (Reporting by Joan Gralla; Editing by Leslie Adler, Leslie Gevirtz)