Connecticut is “poorly poised” to handle a moderate recession when compared to other states, according to a new analysis by Standard and Poor’s Global Ratings Tuesday.
The new state budget’s ability to mitigate longstanding fiscal problems got poor marks Thursday on Wall Street as two of the four major rating agencies downgraded Connecticut’s credit ranking — probably boosting borrowing costs in the future.
Three of Wall Street’s four major credit rating agencies have assigned a “negative outlook” to Connecticut’s bond rating — a warning that the state could face a downgrade, and higher borrowing costs in the next year or two.
A major Wall Street rating agency warned it might lower Connecticut’s bond rating — pushing up interest costs on capital projects — if the state adopts Gov. Dannel P. Malloy’s plan to restructure contributions to the employee pension fund.
While praising Gov. Dannel P. Malloy and the legislature for adopting a two-year plan that is balanced and relies on few one-time revenues, the agencies also noted that Connecticut continues to struggle with “tepid” revenue growth and a small budget reserve that leaves the state vulnerable to “future fiscal shocks.”