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Don't Succumb To Fear

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Don’t Succumb To Fear

To the Editor:

Last week, “Mr Kortze told The Bee that attempting to move forward at this time, considering the current state of national and global financial markets, would be futile. Mr Kortze said no matter how the school board decides to move forward, the money to fund the project does not exist today.”

Despite the crisis in the financial markets, it appears that Mr Kortze’s statement that there is no money to fund capital projects and his implication that the school board is wasting its time in continuing to plan for the HS expansion project is overly dramatic. Is Mr Kortz recommending that all capital projects be stopped and reassessed?

The state legislature expects to approve the voter-supported $38.8 million high school expansion in January 2009. The first installment of the high school expansion project was expected to be bonded in January 2009 and the second installment in January 2010. Luckily, we are not bonding the money today or tomorrow during one of the most volatile times in the history of Wall Street. Even if we did bond the money today, it may not be as difficult as Mr Kortz suggests. On Tuesday of this week, the town of Avon sold $26 million in bonds to pay off their high school expansion project within 15 minutes.

Last Monday, the state treasurer, Denise Nappier, testified to the Banking Committee that even with the worst-case scenario of the credit market not rebounding, Connecticut is able to weather this storm until April 2009 and then at that point, the state may face a cash flow problem. While other states are facing significant credit issues, Ms Nappier reports Connecticut has managed its debt conservatively with enough cushion. She is cautiously optimistic that our economy will rebound.

Also, I spoke to Sharon Dixonpay from the debt management department of the state treasurer’s office last week. Ms Dixonpay reported that the state is closely monitoring the credit situation and the state has access to the bond markets. They plan to be prudent with their decisions on the interest rate for bonding. There may be some disruption on some of the debt issuance for short term borrowing but she stated that municipalities should have access to the bond market. She also mentioned that the state has a healthy Rainy Day Fund to help during this mortgage meltdown period.

Governor Rell is also working on a plan to help small businesses and municipalities.

I am hopeful that the $700 billion infusion, the fed rate reduction, and additional government investment in major banks will also have a positive effect on the market. Seems to me the municipal bond market would be a safe investment vehicle during these turbulent times. Connecticut municipalities do not default on their loans. At Chris Lyddy’s press conference, the Connecticut Attorney General stated Connecticut towns are not allowed to go bankrupt.

We must continue with the discussions to address the high school overcrowding issue and not succumb to the fear on Wall Street. “We have nothing to fear but fear itself.”

Po Murray

38 Charter Ridge, Sandy Hook                                  October 15, 2008

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