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Tuesday, November 10, 2009

Mayor-elect Gatsas reacts to possible bond default

(MANCHESTER) Mayor-elect Ted Gatsas says Manchester taxpayers and budget writers won't be on the hook if the bonds on the Verizon Wireless Arena default. The current State Senator and Alderman, and incoming Mayor reacted to the Josiah Bartlett Center 's report that changes in the state budget could prevent the Manchester Housing and Redevelopment Authority from making its bond payments in 2010.

In 2000, the city funded construction of the Civic Center, since renamed the Verizon Wireless Arena, through non-recourse bonds funded through the city's share of Meals and Rooms Tax Revenues. This year's budget capped those revenues for two years. Last week, Moody's Investor Services downgraded the bonds to "junk bond" status, and warned of a possible default next year. But Gatsas is confident that any problems with the arena won't spill over into the city budget.

"These bonds don't affect city's bond capacity or bond rating," Gatsas says.

Gatsas opposed the state budget when the Senate approved HB 2 in June. He spoke out at the time against cutting state revenue sharing to balance the $11.5 billion spending plan.

"The downshifting is something I had a concern with, as does every community in the state," Gatsas added. "With the JUA in question, what would be the next position that the state may take?"

The budget anticipates restoring the old revenue sharing formula in 2012, and Gatsas hopes the temporary suspension will go away as the economy recovers.

"Everyone hopes the economy is going to recover by then," Gatsas explained. "I would share the hope that the economy would change."

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