Despite Ratings Downgrades, CT Expected to Keep Borrowing

Even though all three major credit ratings firms downgraded Connecticut’s standing in the past week, that won’t stop the state from continuing to authorize the borrowing of hundreds of millions for various projects.

Fitch, Moody’s and Standard & Poor’s all downgraded Connecticut’s debt in the past seven days, with each publishing worries over the state’s planned depletion of its Rainy Day Fund and sagging income tax receipts.

When asked about the ratings, Gov. Dannel Malloy said this shouldn’t be surprising to anyone who’s observed state government for decades.

"If you want to know what those downgrades are about, they’re about those unfunded longterm obligations, which my predecessors were more than happy to whistle while they walked by the graveyard," Malloy said.

Malloy is referring to the buildup of billions in pension payments that weren’t made under numerous previous administrations. Those costs now envelop more than 25 percent of all state expenses.

Rep. Chris Davis, one of two Republicans who sit on the State Bond Commission that authorizes borrowing, says taxpayers have become frustrated with what the state has spent money on.

“When we’re funding aquariums, science centers, $12,000 for clocks, that kind of thing. I think people get upset when they hear about bond ratings going down and they hear us spending $350 million dollars in one meeting,” Davis said.

Davis has taken on the role of opposing most packages, even though he acknowledges that taxpayers do have demands and expectations when it comes to new construction and improvements.

“Obviously we need to be building schools, we need to be building roads and repairing roads. We need to be doing projects that help our infrastructure across the state whether it be clean water or sewer or water line, something like that,” Davis said. 

Bonds are purchased by investors, and the funds from those sales are used to pay for expensive construction projects. Bonds are used for highway and bridge improvements, school construction, and other infrastructure projects.

The governor says even with the ratings downgrades, he says he feels the state has an obligation to make up for the failure to make investments for years, while also not paying for pensions.

“Do I believe that we should go back to the days where we ignored that? The answer is no,” Malloy said.