...NEW YORK (S&P Global Ratings) Feb. 15, 2017--S&P Global Ratings views Gov. Dannel Malloy's 2018-2019 biennium budget proposal for the State of Connecticut as consistent with its negative outlook on the state general obligation rating (##-). Rising state pension and other postemployment benefit (OPEB) payments are colliding with weak revenue growth because of poor economic performance in the state's financial sector. Nevertheless, the governor proposes to largely maintain structural budget balance through ongoing budget cuts, reduced local aid, and various minor revenue adjustments. Assuming current weak revenue trends persist, ongoing state revenues and expenditures would remain largely in balance through the biennium, although high fixed costs could quickly throw the budget out of balance should the economy take a downturn. We calculate general fund debt service, pension, and OPEB payments will equal about 29% of revised forecast revenue plus proposed revenue enhancements in fiscal 2018,...
