Under Full Democrat Control, Connecticut Suffers Another Credit Downgrade

Just when it appeared Connecticut’s fiscal situation under Failed Governor Dan Malloy and his Democrat Enablers couldn’t get any worse, the state has suffered another credit rating downgrade.

Just when it appeared Connecticut’s fiscal situation under Failed Governor Dan Malloy and his Democrat Enablers couldn’t get any worse, the state has suffered another credit rating downgrade. Standard & Poor’s downgraded its outlook for Connecticut’s general obligation bonds on Friday to “negative.” S&P directly attributed its downgrade to the state’s over 100 day-long budget crisis and “substantial tax increases” enacted under Malloy’s previous budgets, and warned that another credit downgrade could come “if the state departs from a structurally balanced budget.” In this year alone, all three major credit agencies, S&P, Moody’s, and Fitch, have downgraded the state’s credit rating while Connecticut’s budget crisis continues with no end in sight.

Without a budget for 105 days, Standard & Poor’s Global Ratings sent the state a message Friday when it downgraded its outlook for Connecticut’s general obligation bonds to ‘negative.’

It didn’t lower the bonding rating from A+, but it revised its outlook from stable to negative for the state’s $19 billion in general obligation debt.

‘The outlook change reflects what we believe to be increasing constraints on Connecticut achieving long-term structural balance, highlighted by the state’s delay in enacting a fiscal 2018-2019 biennium budget for the period that began July 1, 2017,’ S&P Global Ratings credit analyst David Hitchcock said. ‘These budget constraints include revenue weakness because of slow economic growth and recent population decline and reduced revenue-raising flexibility after substantial tax increases were instituted in the last two biennium budgets…’

If the state departs from a structurally balanced budget, if revenues fall below expectations, and if there’s an increase in pension liabilities, ‘we could lower our rating on Connecticut,’ he said.

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