Connecticut Treasurer Erick Russell today announced the early elimination of an additional $176 million of transportation-related debt, bringing the total to $570 million of debt paid off early as a result of 2024 legislative changes championed by Treasurer Russell and Governor Ned Lamont. The early elimination of debt will save taxpayers $726 million over the next decade.
“Retiring state transportation debt early benefits Connecticut taxpayers by reducing the debt burden while we continue to fund and invest in the critical transportation projects they rely on,” said Treasurer Russell. “By strategically using excess balance in the Special Transportation Fund to reduce long-term debt, we achieved savings of $45 million in the current year and $68 million annually from 2026 to 2035.
“This simple but powerful approach to fiscal management is proving to be one of the true successes of the 2024 legislative session, and it will continue to benefit Connecticut residents in 2025 and for years to come. I am hopeful that the legislature will vote this year to extend this practice in perpetuity.”
In recent years, the amount of money held in reserve in the Special Transportation Fund (STF) had grown significantly. Last year, Treasurer Russell and the Lamont Administration proposed using funds in excess of 18% of operating expenses to pay down long-term debt. That provision was adopted by the legislature for the current fiscal year only. Utilizing excess reserves to remove debt from the balance sheet improves the long-term health of the STF by lowering or removing future principal and interest payments on borrowing, known as debt service.
The Legislature is currently considering legislation proposed by Treasurer Russell that would permanently authorize the use of excess in the Special Transportation Fund to payoff outstanding transportation-related bonds. Senate Bill 1461 An Act Concerning the Treasurer’s Recommendation for the Paydown of Special Tax Obligation Indebtedness was voted out of the Finance, Revenue and Bonding Committee with overwhelming bipartisan support.
Earlier this year, the Office of the Treasurer was able to redeem $394 million of Special Tax Obligation (STO) Transportation Infrastructure bonds that were eligible for pre-payment. Today, an additional $176 million of bonds have been discharged with the deposit of funds with the Bond Trustee to redeem the bonds on August 1, 2025, when they become eligible for pre-payment.
In addition to the excess amounts available in the STF, an additional $34 million was used from bond reserves that were no longer needed due to the early payoffs.
More information on Connecticut’s bonding programs is available at www.buyctbonds.com.
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