Connecticut Ranks Last Among 50 States In Credit Analysis By Conning

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Connecticut took a “nose dive” to last place in a report assessing the credit quality of all 50 states released Tuesday by Conning, Inc., a Hartford-based asset manager that does financial research for insurers and institutional investors.

The report took a scathing view on the state’s rising unemployment, declining home prices, high debt per capita and other factors, though state officials resisted the notion that Connecticut’s credit is the worst in the country.

“Connecticut is not on most lists of states in fiscal stress,” said Paul Mansour, managing director of Conning’s municipal credit research group and lead author of the report. “However, the reality is quite alarming. The state is among the worst in job creation, tax revenue growth, and has not yet seen a recovery in home prices. It has very high debt and retirement obligations, little budget flexibility and no rainy day fund balance.”

At stake is the value of debt the state issues to pay for capital projects.

Connecticut’s State Treasurer Denise L. Nappier responded to the report by saying the investing public continues to have confidence in the state’s creditworthiness “given our highest per capita income in the nation, and all four credit rating agencies have recently affirmed the state’s credit ratings with stable outlooks.”

Since 2007, Conning has published a State of the States Municipal Credit Research Report twice a year. It ranks all 50 states on credit quality based on factors such as revenue growth, year-over-year employment gains and foreclosure rates.

North Dakota was at the top of the list, along with other western states, while Connecticut fell from 37th in the last report issued in June to 50th place in the most recent ranking. New Jersey was 49th and New York was 48th.

“I don’t think this means there’s any meaningful increase in the risk of default of any Connecticut bonds … but I think what we’re seeing is that Connecticut’s credit outlook has weakened relative to other states over the past six months,” Mansour said.

The report relies on some factors that are beyond the control of state government — such as home prices — and state officials are doing “quite a bit” to address the factors they can control, said Benjamin Barnes, secretary of the Connecticut Office of Policy and Management.

Conning said that several credit indicators have “fallen significantly” since its last report earlier this year. Year-over-year home prices in the state dropped 4.7 percent, according to the Federal Housing Finance Agency, which is the worst performance of any state.

“Actually, I would prefer to have the suffering that Connecticut has had in the housing area, than what has happened in some western states that had a really catastrophic collapse followed by some levels of growth,” Barnes said. “We never had that catastrophic collapse, but we continue to have weakness, which is frustrating and we’d like to see things turn around. But, on the other hand, we didn’t suffer from levels of foreclosure that you saw in Nevada or California or some other states.”

Connecticut lost 14,700 jobs during the most recent 12-month period, and only Hawaii has lost more jobs as a percentage of overall employment during the same period, according to Conning’s report, which cites Census statistics as of August.

“Those numbers are highly suspect,” said Barnes, the secretary of the state’s Office of Policy and Management. “The numbers are all over the lot. There’s been huge volatility in the jobs numbers in Connecticut, which the (state) department of labor has said are difficult to reconcile with their experience in terms of unemployment claims and things like that. I am suspect about short-term job numbers. In the long run, we have struggled to produce as many jobs as we’d like. That’s why we’ve invested in economic development projects as well as infrastructure projects as heavily as we have.”

Connecticut also has the highest debt-per-capita burden for all states and is ranked 48th in terms of economic debt per personal income, according to the report.

“If one considers Connecticut’s high personal income levels, this low ranking is even more alarming,” wrote the authors of the report, Mansour and Conning’s assistant vice president Jon Rappaport.

Nappier, the state’s treasurer, said Conning’s “simplistic methodology fails to account for the unique manner in which Connecticut issues debt for school construction and other projects: it is centralized at the State level, unlike most other states that have county forms of government and greater debt issuance at the local level. Indeed, were Conning to make this more pragmatic comparison, state and local debt combined and compared to GDP puts Connecticut squarely in the middle of the pack, not at the bottom.”

Mansour maintains it is still debt that the state is responsible for paying while more of its residents are out of work and the value of homes are declining.

Connecticut sold general-obligation bonds at Aa3/AA/AA ratings, “which are considered very strong,” Mansour and Rappaport wrote. The rating agencies noted Connecticut’s wealth and its “history of solving budget problems” when assessing the ratings. Conning says Connecticut hasn’t recovered from the Great Recession and it is “very vulnerable” to federal budget cuts. The ongoing job losses and declining home values portend of future credit stress and the state’s credit ratings risk downgrades, Mansour and Rappaport wrote.

States are recovering from the Great Recession, Mansour said, and state expenditures are growing faster than revenues, particularly in terms of Medicaid and retirement costs. Efforts by the federal government to reduce the deficit “will likely hurt states as grants to state and local governments represent a high proportion of federal spending that is not protected from cuts,” he said.

“While the economic recovery combined with state budget actions is resulting in slowly improving state credit quality, that improvement has been very uneven,” Mansour said. “The reality is that more states remain vulnerable to another recession, and a federal government less certain in terms of providing more stimulus.”

A previous version of this blog post incorrectly attributed comments by Connecticut State Treasurer Denise L. Nappier to Deputy Treasurer Christine Shaw.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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45 thoughts on “Connecticut Ranks Last Among 50 States In Credit Analysis By Conning

  1. Sharpshooter

    “The state is among the worst in job creation, tax revenue growth, and has not yet seen a recovery in home prices. It has very high debt and retirement obligations, little budget flexibility and no rainy day fund balance.”

    The state has been run by Democrats and the unions for far too long…..if we could slip to 60th we probably would…

  2. sue

    How can this be with DANNY P.(rogressive) MALLOY in charge. He solved ALL our problems with his HONEST budget in 2011 and his $1.5 BILLION theft of our money wasn’t that the line

  3. Rob

    Dannell told us that “Connecticut is open for business” while simultaneously increasing business and personal taxes and then giving GIGANTIC Corporate Welfare payments to a select few employers. How does anyone fall for this? POOR prioritization of transportation projects, guarantee of no layoffs for state employees, bad revenue projections. Complete failure.

  4. admiralbrown

    Fiscal Responsibility anyone? I don’t want to think what new taxes Governor Malloy will think up. How about taxing sugary beverages at a penny an ounce? Seriously how much more money can the Democratic legislature think they can squeeze out of the citizens of Connecticut.

    1. Bill

      they will find ways to bring in more money – next is online gambling.

      As far as having any impact on spending – I suspect the dems in the state legislature are too stupid to realize this is not a good thing

  5. meridenite

    If you are a homeowner or own a business prepare to pay a huge increase in property taxes as the big cut to expenses will be in aid to cities and towns and local education.

  6. joe867

    This is the result of BIG government, bloated unfunded pension and health care retirement packages for state workers and no real resolve to correct the problem. Less spending, less government, pay what you owe and stop the blame game. But our leaders have quite the opposite idea, more government, more spending and more taxes. Make your money here and move out.

  7. DaTroof

    Congrats Connecticut! Another dubious honor to go with highest taxed state, most debt per capita, worst state to retire to, and worst gasoline prices! Aren’t we special!

    Even a liberal could see that Democrats are taxing, spending, and borrowing us into oblivion. Keep electing lefties like Governor Dan and and watch this state circle the drain.

    Connecticut- the new California.

  8. Hot Dam

    I sincerely hope that the GOP will stick this information right in the face of the Governor, his lacky Legislature, AND the voters….

    Come the next local and state election cycle, if we re-elect any one of the tax-and-spend incumbents, we will have no one but ourselves to blame when the sorry state goes down the tubes.

    Of course, there is also the possibility that Malloy-boy will not be around for re-election if his buddies in Washington offer him some cushy patronage job for his efforts in keeping the state as blue as blue can be.

  9. alan

    It is a great state to be employed by govt or especially public education. For ex. a New Canaan teacher or a Putnam teacher(cheap town) are paid almost the same after 25 yrs- that teacher(or state worker) is royalty in Putnam(or North Canaan, Griswold, etc) and can buy the best house in town. So it is not all bad if you are the side receiving(I am not but know many who are). It suprised me how many teachers had problem with Sandy and their beach house- teachers w/beach house? How can tha be

  10. alan

    at least with these taxes we have a balanced budget(“oops, Barnes said what?” scratch the balanced budget. Anyway with all our investments we have grown jobs (“what, we have less jobs than 1989″, my bad. Anyway with out income tax we have funded our pensions (“what we owe the most in the nation per capita”) ixnay on the ensonspay. Anyway we are number 1 in resolutions by state senators declaring the dividing line between the Red Sox and the Yankees to be thier town. That must count for something

  11. Mitchell Simpson

    Well .. this should be a warning to those who voted for Malloy. It’s not working, is it? It’s getting worse, isn’t it? Hopefully the Courant will step up and really follow this. This is just the tip of the iceberg, but too often, no attention is paid. Besides, isn’t uconn basketball more important?

    1. semper39

      Rather than engaging in character assassination, perhaps you could rebut the article with some facts?

    2. Courant Business Editor Sandra Csizmar

      The Paul Mansour referenced in the link provided is from Scanton, Penn. He is not the same Paul Mansour who is managing director at Conning, who was interviewed for this story. — Sandra Csizmar, Courant Business Editor

    3. Alex

      So Lawrence, thoughtful man that he must be since he’s a democrat, immediately calls Paul Mansour a right-wing nut job. Interesting isn’t it, how quickly the democrats start name calling. It’s amazing that he didn’t call Mansour a racist………oh, that would be the next epithet.
      The article does tell the truth about the governor, Lawrence, it’s just that you choose to defend the indefensible and all you had was your diatribe about right-wingers. How about you left-wingers? Where’s the money coming from to bail out the state?
      Oh, I forgot, you can count on the President to do his loaves and fishes routine with the $82 Billion he’ll get from his tax increase on the wealthy. You know, the $82 Billion the Joint Tax Committee says the President’s tax plan will actually raise. You know, the $82B he said will balance the Trillion dollar deficits and pay for all sorts of things.
      What ignorant people Lawrence and the others that support the President and the Governor must be. Do they really believe Malloy and Obama understand the economics of running a business and having to generate a profit in order to be able to pay for salaries and benefits?
      Do they really believe the State can afford to have its workers put in grueling 6 and 3/4 hour days toiling for the State and get the job done?
      Do they have any idea the culture that exists among the State workers and the recipients of State pensions and benefits?
      If they do then they must believe Obama will be sending boxes full of that new tax revenue to the states to bail them out. First it will be Illinois and California which are bankrupt and then it will be others loyal to him and his party.
      Get ready Connecticut. You continue to vote for empty suits like Murphy and then complain about the cost of gas and the loss of jobs and can’t figure out why it’s happening to you. Get ready because it’s going to get worse.

  12. OK

    These dudes at Conning likely spent lots of time figuring this out – my parakeet could tell you CT is toxic for buisiness.

  13. Dr. Aki Bola, Esq.

    Don’t forget to thank a democrat politician for giving us the worst business environment of the entire US. There was hope that things would improve once Fake ‘Nam Vet SueThemAll left town, but then Malloy slammed the state with a huge tax increase and bogus suggestion box and health savings to unbalance his fraudulent budget. Keep voting that straight D ticket like your union and the Courant tell you is good for you. Uh huh.

  14. Lawrence

    I will say to the OP that Conning uses 13 indicators; in April 2012 all of New England (except VT) as well as Penn. and NY and NJ were in the 31-50 rankings.

    They count debt per capita, which CT has a lot of, in part due to CT’s fiscally liberal school constructive reimbursement policy. Perhaps we can cut down our state bonding debt per capita by giving less money to communities for school construction and rehab; makes it easier to sell to the local population on new schools in town when they’re not “seeing” the bill; let local referendums decide if they want to pay 80 or 85 or 90 percent of the cost through increased local property taxes, instead of just 40 percent or so.

    Conning tracks one-year home price changes; the northeast has some of the most expensive housing in the country; bubble prices burst and have yet to climb back. Another strike against CT.

    Conning counts tax revenue growth; we had a long-delayed change in our income tax brackets, I don’t think it was enough, but it looks like it’s not going to change in the near future. All new growth will have to come through increased employment and salaries; my sense is Wall Strreet and large CT corporations (insurance, pharma, defense, etc.) are waiting to see how the ‘fiscal cliff’ negotiations are solved in Washington before making firm plans about new hires or expansions. A shame, since corporate America has regained all of its bottom line and then some from pre-recession levels.

    This is a timely report considering the mid-year deficit projections just out which will result in some real budget adjustments; I’d be interested to see Connning’s next report in May, though I don’t expect much change in that one since it will only reflect mid-year adjustments and maybe some modest financial recovery.

  15. Fed Up

    Why do people in this state continue to vote the Democrats in? We are in a fiscal crisis and we keep voting these same Democratic clowns in, so they can continue to tax and spend our money foolishly. And then we wonder why CT is going down the tubes. C’mon people, wise up. I can’t wait to retire and move out of this state. We really have become the California of the East. Congrats Democrats–for a job well done (not).

  16. Peter

    Connecticut also features a completely dysfunctional and horribly corrupt “family court” system. A system where judges routinely financially devastate parents and families of divorce by funneling every available asset they may have available, even and up liquidating retirement accounts and children’s college funds under the threat of imprisonment, into the hands of unethical Guardian ad Litems who do nothing to represent the children they are assigned to protect. None of this being in any way in the best interests of children or families of divorce. Why do judges do this? Because most of them used to be GALs themselves and this is how they made their personal fortunes.

  17. Tom Biltmore

    Malloy created a 1st budget of his term that relied on overly optimistic assumptions on job/economic growth in Ct, used one-time accounting gimmicks to balance the budget, and relied way too heavily on taxes and not enough on the draconian cost cuts that many in the state have been crying for but the Malloy administration has been loathe to put in place. Now those cost cuts that were needed many months ago are being forced on Governor Malloy. Meanwhile, the governor has abandoned his promise of GAAP accounting for greater budget transparency, cut what I consider to be a sweetheart deal with the state workers’ union that dramatically reduces any future governors’ flexibility to cut salaries and pensions and has totally drained the state’s rainy day fund. I’m losing confidence in this governor and administration by the minute. Much of the tough cost cutting discipline touted by Malloy’s opponent Tom Foley and Raimondo in RI actually looks very prudent at this point. What’s next if our state doesn’t act quickly–who knows? Could there possibly be further debt downgrades by the rating agencies? Maybe. Will Ben Barnes and the governor again blame the ratings agencies for their downgrades? Possibly. I think they should spend more time looking in the mirror where the real blame belongs and begin to face the music that much more draconian cost cutting and pension/long-term obligation measures are needed in the state of CT. Re:Conning analysis, perhaps it will open some eyes in current administration of how much these tough actions are needed NOW. Also adding to future state economic malaise is that CT casino revenues to state coffers will continue to plummet as competition intensifies for Indian gambling.

  18. NoOnePartyRule

    Fiscal health is based on jobs.
    Mental and physical health is based in large part on jobs.
    Housing values are based on jobs.
    Keeping young people in CT is based on jobs.
    Not “pockets” of jobs. LOTS of jobs.

    It’s about creating the climate for job creation, Gov.

    And “well we’re not as bad as NY or Mass” is not a viable business climate strategy.
    Neither is “lobbying for another sub and sole-source jet engines”, nor a busway or rail extension. Only business can create enough jobs for general prosperity, and continuing to strangle business and driving up costs for consumers, only pushes ambitious people elsewhere. There are some REASONS why this state can’t create net new jobs.

  19. Jim Connolly

    These Republicans and Tea Party kooks are actually happy at this news. They are truly sick people! Connecticut has company at the “bottom”with NY and NJ. Seems like the list is rather arbitrary. No reason to panic unless you are a Bagger hysteric who enjoys being in a panic.

    1. Alex

      Ah, Jim Connolly, another useful tool of the democrats. Got to mention the Tea Party and Baggers.
      Wake up Jim.
      Have you ever had an original thought?
      Have you ever gone to a Tea Party rally and seen the respectul, tax paying, citizens carrying their own handmade signs?
      They’re not like your union thugs with their printed SEIU signs leaving litter and debris all over the streets as they have done over and over again.
      They are people that worked for a living and paid their taxes and are fearful of what the future holds for their children and grandchildren.
      People came to this country for the opportunities it offered to those who had none in their homelands and who were willing to work to achieve their dreams. Due to an electorate that is becoming more and more dominated by people who are takers our country faces a grim future for most. Take a look at Greece, Spain, Italy and others where they’ve used up their capital and where the people riot because their retirement age is raised from 55 to 60.
      That’s us in a few years.
      But, if you and people like you have your state pensions you think you’re all set and you start name calling. Guess again, as some cities have already declared bankruptcy and cut their pensions and benefits and yours may be on the list shortly as long as the State continues to build 10 mile busways to nowhere.
      It may be hard to comprhend, but money doesn’t actually grow on trees………..

    2. DaTroof

      Jim, ever the obedient liberal. This state and country is drowning in debt, spending, and borrowing so naturally Jim has to blame republicans. Where are the republicans in the northeast Jim? Your party is presiding over horrendous state budgets but don’t let facts get in the way when there are republicans to bash. What’s the statute of limitations on blaming Bush?

      Wake up Jim- the country is going down the crapper. Sure, tax the rich to put a 5-10% dent in the deficit. Where’s the rest of the deficit reduction coming from? In Connecticut, Malloy tried a $1.5T tax to preserve his precious state workforce last year. How’s that workin’ out for ya? His hands are now tied this biennium as he can’t layoff any state workers to balance the budget.

      Keep electing liberals and watch the country cirle the drain.

  20. SJay

    “I don’t think this means there’s any meaningful increase in the risk of default of any Connecticut bonds … You shouldn’e be able to have your cake and eat it too. People read headlines first.

  21. sue

    This report is bogus. Just ask DANNY BOY. He’s personally solved ALL our problems with his HONEST budget. Finish laughing. Yes it’s sad we have a clown for a governor but then again this state votes for clowns like DANNY BOY and the democrats (RATS) and just kept them in office.

  22. smokeclay

    Progressives,are incapable governing without blame and excuses. History proves socialism has failed and caused decades of human suffering. Its’ sad the state I used to call home has become a thriving bankrupt socialist utopia.

  23. Hank Sullivan


    The state’s tax collections are lower than expected, despite tax increases totaling $1.5 billion, including those on income, retail sales, corporations, estates, electric power plants, alcohol, cigars and cigarettes. Malloy’s budget increased taxes on more than 50 items in different categories, including charging sales tax for the first time on previously tax-free items such as nonprescription drugs, clothing and shoes under $50, pet grooming, automotive towing, manicures and pedicures. The tax on retail sales increased to 6.35 percent, while the maximum rate on the state income tax increased to 6.7 percent for those with the highest incomes.

  24. Daisy14

    This is what one New England state did (Maine)- reduce all pensions 20% across the board (teachers and state and local employees) – freeze the pensions for three years and then only allow increases if warranted on the first $20,000. That won’t fix everything but it will help. It must be done through the legislature which can override any Union contracts via law.

  25. JT

    were so done . goddamn yee malloy ! one time tax increase he said … shared sacrifice for all HE SAID ..HE LIED !!!!!!!!!!!!!!!!

  26. Alistair Hepburn

    We need to change the entire so-called “leadership” at the State Treasury. I keep hearing the same old regurgitated blather from the Treasurer and her staff.

  27. ralphccs

    The scary about all this is that everyone who comments on these articles, realizes what inept leadership we have in government, but with the current demographics we have in this state, he will probably get reelected.

  28. Tim Hendrie

    Oh great CT trails Mississippi, Welcome to the Detroitification of Connecticut. This is what happens when voters keep electing socialist MORONS. Way to go Danno!

  29. dave wilsoon

    Danno is not only a liar, but a sociopath. I don’t understand How the dummies who live in this Titanic state keep voting these socialists in – tax and spend tax and spend, then blame somebody else. We are idiots. Will the last taxpayer left in CT please turn out the lights.?

  30. Tom H

    Republican Governor Scott Walker of Wisconsin (elected in 2010 like Dan “The Taxman” Malloy) walked into a $2 billion dollar deficit and turned it into a surplus in two years. For his efforts the unions forced a recall election of Walker, which Walker handily won. Any way we could work a trade with Wisconsin…..we get Walker and Malloy goes to Wisconsin? I’ll personally pay Malloy’s ONE-WAY air fare to Wisconsin. Malloy couldn’t balance his own check book!! Connecticut is a great state, if we could only get rid of all the “life-long Democrats” and libtards! That also goes for national politics also.

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