By Keith M.Phaneuf
The new state budget’s ability to mitigate longstanding fiscal problems got poor marks today on Wall Street as two of the four major rating agencies downgraded Connecticut’s credit ranking — probably boosting borrowing costs in the future.
Fitch Ratings Inc. and Standard & Poor’s both lowered their bond ratings in response to the $19.76 billion budget Gov. Dannel P. Malloy and the legislature’s Democratic majority crafted for the fiscal year beginning July 1.
The other two firms, Kroll and Moody’s Investors Service, didn’t change their ratings, but did maintain a “negative outlook.” This represents a warning that they intend to monitor state finances closely over the next year, and sometimes is a precursor to a formal downgrade.
“The message from the credit rating agencies couldn’t be any clearer: It is high time for a sustained commitment to fortify the state’s financial footing, in the midst of persistent economic uncertainty,” state Treasurer Denise L. Nappier wrote today in a statement announcing the downgrades.
