State Bond Outlook Downgraded

HARTFORD (AP) — A national bond rating agency has downgraded its outlook for Connecticut’s credit rating from “stable” to “negative,” citing choices made to cover the state’s budget deficits.

Moody’s Investor Services says it’s concerned the state will issue $947 million in bonds to cover last fiscal year’s deficit, and how the new, two-year $37.6 billion budget borrows against a future, unnamed revenue stream to raise $1.3 billion.

Such one-time solutions, Moody’s says, create future budget problems and leave the state vulnerable if an economic recovery comes slower than expected. Moody’s says the state will likely struggle more than others to balance its budget.

The same report, however, did not downgrade the state’s relatively high bond rating on approximately $12 billion in outstanding general obligation bonds.