DeLeo sidestepping Baker on bonds

Climate change bonds would be exempt from caps

HOUSE SPEAKER ROBERT DELEO is using a novel funding approach for his climate change legislation, authorizing the issuance of $1 billion in state general obligation bonds that would be exempt from controls set by the Baker administration.

The Legislature regularly approves bond authorizations allowing state government to borrow money for all sorts of projects. To prevent overspending with borrowed money, the governor has the legislative authority to set caps on the amount of bonds that can be issued each year and the amount of interest on bonds that can be paid out of the state budget. The two caps give the governor wide latitude to determine how many bonds actually get issued each year and for what purposes.

DeLeo’s bill would sidestep the caps, exempting the bonds for his climate initiatives from the limits typically enforced by the governor. The speaker’s approach also ensures that the bonds for his climate initiatives would not be pared back by the governor.

Catherine Williams, the communications director for DeLeo, said in an email that the goal of the bill is to get cities and towns the resources they need to address climate change “without impacting the Commonwealth’s other spending priorities.”

Rep. Thomas Golden of Lowell, the House sponsor of the so-called Greenworks bill, said the funding approach contained in the legislation was adopted to give the climate change bonds special priority. He said there was some concern the bonds could get lost in the shuffle if they were subject to the caps. He said the funding approach also ensures the money is available without taking away bond funds from other projects.

“Speaker DeLeo wants to have a leadership role on climate change,” Golden said. “It’s a critically important issue.”

Golden also said Baker tends to be conservative in issuing bonds. “There is an argument to be made that more money can be spent on bonding,” he said.

Baker has filed his own climate change legislation, which also calls for raising $1 billion in bond money. Baker’s bill differs from DeLeo’s legislation in how it pays the interest on the bonds. While DeLeo’s bill would pay the interest using funds from the state budget, Baker’s bill would use the proceeds from a slight increase in the deeds excise tax to pay the interest. The deeds excise tax is the tax paid when a property is sold.

Michael Widmer, a long-time budget analyst, said DeLeo’s approach is unusual but not illegal. “It’s a way of not living within the bond cap and a way for the speaker to gain some measure of control over spending priorities,” he said.

Tim Cronin, the policy and partnerships manager at the Climate Action Business Association, reviewed the speaker’s Greenworks bill in a recent post on ClimateXChange and concluded DeLeo’s “creative solution” on financing gives far less control to Baker.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

“Based on our preliminary research, this procedural circumscription of the governor has never been attempted before in a bond bill,” he wrote.

Golden, however, said other bond authorizations have sidestepped the caps on bonds and debt service. He said he thought an accelerated bridge repair program and a school building assistance initiative were funded with bonds exempted from the caps. Widmer said he, too, thought the approach had been used before, including the issuance of bonds to raise money to pay a contractor who widened Route 3 north.

A Baker administration spokeswoman had no immediate comment.