Move to negative from stable
should not be ignored
Senator John A. Kissel (R-Enfield)
said today he is extremely concerned about Monday’s
report by Moody’s Investor Services in which they
downgraded the rating for Connecticut’s General
Obligation bonds from stable to negative.
“This significant downgrade is Wall Street’s
way of telling Connecticut what many of us have been
saying for years: we cannot continue borrowing and spending
like there’s no tomorrow. I’m extremely
concerned over this bond rating downgrade, and it should
not be ignored. This quote in the report rings out:
‘The negative outlook reflects the choices made
to address the state’s biennial 2010-2011 budget
gaps as well as the shortfall for fiscal 2009, including
a majority of non-recurring solutions and deficit financing,
combined with a credit profile that includes significant
long-term liabilities.’ If we were a family and
had a credit rating like this we’d be working
at that Renaissance Fair like in those television commercials
for FreeCreditReport.com.” Senator Kissel
said. “Unfortunately, those commercials
are funny, but our new bond rating is not.”
Last week the Office of Policy and Management projected
a $388.5 million deficit for the current fiscal year,
a number likely to grow in the months ahead.
Senator Kissel said, “No one
wants to be the bad guy. Spending cuts are painful and
unpopular, but the sooner we act the better off we’ll
be. We can’t ignore reality. This line from the
Moody’s report should be a warning: ‘Connecticut
also compares unfavorably on measures such as debt ratios
that are among the highest in the nation, pension funding
levels that were among the lowest in the country in
2008 even before the market turmoil is factored, and
other post employment benefit (OPEB) liabilities that
are larger than the size of the state’s annual
operating budget..’
He added, “While the Moody report
was bad news for Connecticut, I am hopeful it will finally
compel the majority party to take this financial crisis
seriously when we meet in the coming months to work
out a deficit mitigation plan.”
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