By Christine Stuart
HARTFORD, Conn. – Fitch Ratings maintained its AA rating for Connecticut bonds in anticipation of the sale of $400 million in general obligation bonds later this month. That’s the good news. The bad news is that Fitch also maintained its negative outlook of the state based on “budget vulnerability.”
Fitch Ratings lowered the outlook for Connecticut’s bonds from stable to negative in July 2013.
In its recent report, Fitch stated that the negative outlook “reflects the state’s reduced fiscal flexibility at a time of lingering economic and revenue uncertainty.”
Andrew Doba, a spokesman for Gov. Dannel P. Malloy, stressed that the rating remains unchanged from last year and that the state is making progress putting money aside and paying down its debt.
“We have a surplus, and we are making payments to address the state’s long-term debt,” Doba said. “In fact, the governor has reduced the state’s overall debt by more than $11.5 billion. The fact that it takes a long time to fix what took a long time to create should be surprising to absolutely no one.”
House Minority Leader Lawrence Cafero, R-Norwalk, called the report “troubling.”
“The negative outlook is troubling because, despite all the rhetoric, Connecticut continues to pile on debt and is failing to meet its obligations without borrowing and budgetary gimmicks,” Cafero said. “Fitch also warned that we are in danger of having our credit downgraded when the agency stated, ‘An inability to meet or exceed budgeted forecast expectations could lead to a downgrade.’’’
If the markets are concerned, then lawmakers should be concerned, Cafero said.
See the complete story at CT News Junkie.