S&P, Fitch Downgrade New Haven's Bond Rating
Two credit rating agencies have downgraded the city of New Haven’s bond rating.
This comes as the city is set to sell $58 million in bonds for new infrastructure projects and $160 million to pay off existing bonds.
Mohit Agerwal, chair of the city's Financial Review and Audit Commission, says the lower bond rating from S&P and Fitch could lead to higher interest rates that would force the city to spend more on debt in the long run.
“It’s like opening a new credit card. We’re opening a new credit card, taking $160 million on that credit card because that credit card’s got a more lenient payment cycle, and then using that to pay down the current debt.”
S&P says its lower rating came from the city’s weak management and its limited long-term financial forecasting. The Mayor’s office says it wasn’t able to forecast that the last state budget would come in late with less-than-expected grant funding.
New Haven faces a $15 million deficit for the last fiscal year and Agerwal is projecting a $30 million deficit this fiscal year. New haven has raised its mill rate by 11% to close its deficits.
This story was updated to reflect a detailed description of the bonds the city of New Haven is planning to issue in August, and the city’s budget deficit for both the last and current fiscal years.