Connecticut Commentary: Red Notes from a Blue State

S&P Global Ratings has lowered Connecticut’s rating one notch from A+ to A. Credit analyst David Hitchcock provided a list of reasons justifying the downgrade. Hitchcock noted, according to a CTMirror story , that Connecticut has one of the highest per capita debt ratios in the nation, having ended the last fiscal year with a taxpayer bonded debt approaching 24 billion. The state has been struggling with ways to provide support for its poorly funded municipal teachers’ pension program. Connecticut, according to Hitchcock, “has a history of deficit financing during recessions.” Connecticut has yet to recover fully from a recession that official ended several years ago. The state’s emergency budget reserve is dangerously low at $210 million, according to Hitchcock, an amount just larger than 1 percent of annual General Fund operating costs. CTMirror reports that “Comptroller Kevin P. Lembo recommends a reserve of 15 percent.”

Governor Dannel Malloy has vowed several times not to raise taxes. There is no third act in Connecticut for a governor who has raised taxes twice in an effort to discharge repetitive deficits and failed conspicuously to balance budgets. Mr. Malloy and his Democratic confederates in the General Assembly have imposed on Connecticut the largest and the second largest tax increases in its history, with little amelioratory   effect. Budget analysts project a $1.42 billion deficit in 2017-18 and a $1.60 billion shortfall in 2018-19, according to a CTMirror report, and revenue tributaries that in the past have washed away Connecticut’s deficits have diminished.