Connecticut Treasurer Erick Russell today announced the early elimination of an additional $242 million in transportation-related debt, which will save Connecticut taxpayers $313 million over the next decade. Over the past three years, $812 million of transportation-related debt has been retired early, saving taxpayers a total of $1.04 billion. The savings were enabled through new legislation championed by Treasurer Russell and supported by Governor Lamont, as well as the impact of a modernized transportation bond indenture.
“Paying off transportation debt early underscores Connecticut’s ongoing commitment to responsible, long-term financial stewardship,” said Treasurer Russell. “This proactive step reduces taxpayer debt obligations and creates flexibility to invest in future transportation projects and other critical programs.”
The legislation requires that any surplus in the Special Transportation Fund (STF) exceeding 18% of operating expenses be used to reduce long-term debt. Initially adopted as a one-time measure in 2024, this policy was made permanent by the General Assembly in 2025.
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 amount of money in the STF above 18% of operating expenses for Fiscal Year 2025 equaled $57 million.
In addition, a modernized transportation bond indenture was proposed by Treasurer Russell and approved by the State Bond Commission in October 2024 to update and replace a 40-year-old document. The new indenture eliminated the need for a debt service reserve for new bond issues and allowed for the release of existing reserve funds as outstanding debt is paid down over time. This year’s debt paydown included $199 million from bond reserves that were no longer required.
“By strategically using excess balance in the Special Transportation Fund and releasing reserve funds to eliminate long-term debt, we achieved savings of $6 million this fiscal year, and $34 million annually from Fiscal Year 2027 to Fiscal Year 2035,” said Treasurer Russell. “The actions we’ve taken not only support critical infrastructure upgrades and job creation, but they also further strengthen the state’s fiscal position, so that we have the flexibility we need to support critical programs and services for families across our state.”
More information on Connecticut’s bonding programs is available at www.buyctbonds.com.
Photo by Josh Sorenson: https://www.pexels.com/photo/grayscale-photo-of-top-view-photography-of-road-with-vehicles-1586134/
