CT Gets Thumbs Up From S&P For Fiscal Health

HARTFORD — The state received a bit of good financial news this week courtesy of Standard & Poor's, which raised Connecticut's credit score.

Gov. Ned Lamont said Monday he received notification the credit rating agency Standard & Poor’s is raising Connecticut’s general obligation bond outlook from stable to positive.

“Building on last year’s credit rating increase, this improved outlook further demonstrates Connecticut is on solid financial footing," Lamont said. "This progress is the direct result of historic payments to our unfunded liabilities, a record rainy day fun, and smart investments in the future of our state.
"Connecticut residents will benefit from this improved outlook in the form of lowered borrowing costs and the signal that this sends to businesses that our state is a place to grow and invest," he continued. "While we should celebrate our successes, we must keep a cautious eye on the future.

"This is not the time for excessive and unstainable spending, rather it is a further indicator that we must continue to make reasonable and responsible investments that provide for our children, grow our economy and improve the lives of everyone who calls Connecticut home.”

State Office of Policy and Management Secretary Jeffrey Beckham said the key issues continue to be the rainy day fund and unfunded commitments within state government, such as pensions.

“In meetings with S&P following the enactment of the fiscal year 2023 budget revision, the message from their team was clear – Connecticut is on the right path with both a sizable rainy day fund and making additional payments on our unfunded liabilities," Beckham said. "Investors want us to continue to take both of these issues seriously, and if we do, we will be rewarded with lowered borrowing costs.”

In its notice to investors that was released Monday, S&P said Connecticut surpluses are essential to good fiscal standing.

“We believe Connecticut has recently demonstrated a commitment to restoring budget reserves during periods of economic and revenue growth that could insulate its finances from recessionary headwinds," S&P wrote.

"State officials estimate that Connecticut will yield general fund surpluses at the end of fiscal years 2022 and 2023 and grow the projected biennium-end BRF balance to $3.31 billion, or a strong 15 percent of fiscal 2023 general fund appropriations (including mid-biennium budget adjustments) for the third consecutive fiscal year. "

In 2021, Moody’s, Standard & Poor’s, Fitch, and Kroll also upgraded Connecticut’s general obligation bond ratings.