Fasano: Credit Ratings Downgrade Should Be a Wake Up Call

March 10, 2015

S&P downgrades CT’s debt assessment from ‘stable’ to ‘negative’

HartfordSenate Minority Leader Len Fasano (R-North Haven) released the following statement regarding Connecticut’s new credit ratings announced yesterday. Standard & Poor downgraded its assessment of CT’s debt from ‘stable’ to ‘negative.’ This is the first time Standard & Poor has identified a ‘negative’ rating for Connecticut over at least the past 14 years. Other agency ratings remained stagnant, showing no signs of improvement. Fitch also maintained its ‘negative outlook’ for Connecticut’s solvency.

“While Secretary Barnes has applauded the stagnant state of Connecticut’s finances, these ratings show that Connecticut is still on a downward trajectory. In my opinion, this is certainly not something to celebrate. This should be a wake up call for Connecticut.

“I am sure Secretary Barnes read S&P’s explanation for the downgrade, which cited a lack of a structurally balanced budget amid a time of national economic growth. I am also sure he read the Fitch statement, which cited the state’s inability to return to structurally sustainable budgeting. If I am the fiscal steward of the state I would not be hailing anything except for maybe the fact that CT’s pockets of high wealth have prevented further downgrade to our credit rating.”

“I agree with Treasurer Denise Nappier, in that I am thankful the majority of our ratings were not downgraded further. But I am also deeply concerned about our overall decline. Despite economic improvement across the country, Connecticut continues to struggle, budget holes continue to grow, and collective bargaining, debt service and employee retirement costs increasingly weigh us down and threaten stability. The governor has bonded over $1.9 billion last year and this year already plans to bond $1.48 billion dollars, with 9 months to go! The governor has also purposefully recommended reducing required debt service obligations to the tune of $325 million. This is the kind of behavior that makes people on Wall Street shake.

“We are in a financial crisis and these ratings are blaring signs of our complete inability to manage ourselves out of this continued downward trajectory,” said Sen. Fasano.