State Treasurer Stacy Garrity is confident that her budget impasse loan program is legal, as the treasury began issuing the first loans this week despite the previous dispute over the matter in the state Senate.

The program — which Garrity announced last month amid the now nearly 16-week state budget stalemate — will loan $500 million from the state’s short-term investment pool to certain counties and social service agencies which haven’t gotten their state appropriation .

The first $3.9 million of those loans went out this week, Garrity announced, with another $9 million expected to be disbursed soon. The loans carry interest rates of around 4.5%, consistent with what Garrity has described as her broad legal authority to make prudent investments of state funds, but not to lend money

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