Connecticut’s ‘AA-‘ rating reflects its strong fiscal management, including robust budgetary controls and reserve funding mechanisms. The state’s economic profile is wealthy but slow-growing, with revenue growth expected to be modest and below national inflation rates. Connecticut’s long-term liability burden is high, primarily due to pension obligations. The state has made significant pension contributions and implemented reforms to manage these liabilities. The Positive Outlook indicates expectations of continued revenue growth and adherence to budgetary constraints. Connecticut’s unemployment rate is low, but its labor market recovery has lagged behind national trends. The state projects revenue and expenditure growth for fiscal years 2025 and 2026, with no new tax policy changes in the 2024 session. The proposed budget includes increased corporate taxes and funding for a universal preschool program. Fitch Ratings notes the state’s ability to manage financial pressures and maintain fiscal balance despite past tax reductions.
Mon 14 Apr, 2025