Connecticut’s credit rating downgraded by 2 agencies

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HARTFORD — Two bond rating agencies are downgrading Connecticut’s credit worthiness, citing uncertainty about whether the state has the financial flexibility to handle any future budget challenges.

Both Standard & Poor’s and Fitch Ratings announced Thursday their credit ratings for Connecticut’s General Obligation bonds dropped from AA to AA- with a stable outlook. A lower credit rating means higher borrowing costs.

David Hitchcock, S&P Global Rating’s credit analyst, says substantial revenue shortfalls have left Connecticut with “low reserves” and an increasing share of the budget devoted to fixed costs. He says Connecticut has “less flexibility to meet unanticipated revenue shortfalls” or deal with a potential national economic downturn in the next several years.

Gov. Dannel P. Malloy’s budget office touted two other agencies maintaining their ratings, not commenting on the two drops.