Fresh Off Another Downgrade, Connecticut Has a Plan to Lower Borrowing Costs

Governing: Finance
Subscribe to Governing Magazine & Newsletters
Follow us on Facebook / Twitter / LinkedIn


Fresh Off Another Downgrade, Connecticut Has a Plan to Lower Borrowing Costs

By Liz Farmer

Besieged by budget shortfalls, Connecticut’s credit rating was downgraded in recent days by Fitch Ratings and Moody’s Investors Service. The downgrades were the state’s fourth and fifth in the past year alone. But if State Treasurer Denise Nappier gets her way, that credit hit might not matter the next time Connecticut goes to sell bonds.

Sponsor: City Accelerator
Nappier wants the state to start offering investors revenue bonds that are paid back directly from the state’s income tax revenues. Called tax-secured revenue bonds, these new bonds would be offered in place of general obligation bonds, which are backed by the state’s general revenue collections. Nappier’s office believes the dedicated income stream would mean the bonds would fetch ratings as high as AAA, resulting in a better interest rate and lower debt service costs. The idea has received mixed reviews. While some observers call it a product that will offer comfort to bondholders wary of Connecticut’s troubles, others say it’s a “financial engineering gamble” designed to game the market. “To create something out of nothing — they’re not being more fiscally responsible by doing it this way,” says Municipal Market Analytics’ Lisa Washburn. Keep reading >>

Public Procurement

Over the next two weeks 8 cities will be sharing their approaches to local procurement processes. We invite you to review pitches from Charlotte, Chicago, Los Angeles, Louisville, Milwaukee, Memphis, Newark, and Philadelphia. Share your thoughts on their potential to expand city innovation and increase economic opportunity. GIVE YOUR CITY 5 STARS.



Why Few Cities Will Take the Supreme Court Up on Their Right to Sue Banks

The recent ruling leaves open a key legal question that could make cities unlikely to file suit.

No Help From Noah: The County That Banked on a Religious Theme Park to Solve Its Money Problems

Facing bankruptcy, Grant County, Ky., invested in the park hoping for a new revenue source. But cash has yet to start flooding in.

Raising the Gas Tax Is No Longer Taboo In Many States

Nearly half the states have increased fuel taxes in the past five years, suggesting it’s perhaps not the political risk it was once thought to be. Plus: To Raise Gas Tax, South Carolina Lawmakers Override Governor

The Growing Threat to Municipal Bonds

Proposals to cap or eliminate their tax deductibility would be a serious blow to efforts to improve our infrastructure.

Can Raising the Minimum Wage Cut Medicaid Costs?

Pennsylvania’s governor is using that logic to persuade lawmakers to adopt the nation’s highest minimum wage. Not everyone is convinced.

Why Some States Leave Federal Child Care Grants on the Table

In recent years, a handful of states have missed out on millions in federal subsidies for child care.

The Worrisome Relationship Between Population Projections and State Spending on Kids

A new study confirms a long-held assumption but also reveals a potentially big problem for the future.

Finance writer Liz Farmer’s roundup of money (and other) news governments can use. Sign up to have it delivered every Friday to your inbox.


Governing has 10 others delivering news and commentary on a wide range of topics straight to your inbox.

Unsubscribe | Opt out of all e.Republic email | Privacy Statement
© 2017 e.Republic. All rights reserved. 100 Blue Ravine Road, Folsom, CA 95630. Phone: 916-932-1300

Related posts