A new report found Connecticut’s credit quality still ranks among the worst nationally due to modest job growth and high levels of debt.
Hartford-based investment manager Conning in its latest biannual “State of the States” report ranked its home state No. 44 in the nation for credit quality, up two spots from May.
Conning cited Connecticut’s bottom five employment growth (0.49 percent) from Aug. 2017 to Aug. 2018, high levels of economic debt, overdependence on personal income taxes and a low general fund reserve balance, although it “significantly” improved since Conning’s May report.
Connecticut was, however, able to rise out of the nation’s bottom five in credit quality as it led the nation in revenue growth for the 12 months ending June 30. The state also ranked highly in GDP per capita (No. 4), median household income (No. 8) and GDP Growth (No. 15).
Connecticut’s credit quality ranked last in New England, trailing Vermont (No. 41), Maine (No. 36), Rhode Island (No. 28), Massachusetts (No. 18) and New Hampshire (No. 6).
Conning’s top five in credit quality were Colorado, Idaho, Utah, Texas and Nevada, respectively. The bottom five were Mississippi, Louisiana, Kentucky, New Mexico and New Jersey.
The investment manager said the western and southeastern portion of the country contain its top-ranked states as they experienced economic growth above the national average.
Conning said the Tax Cuts and Jobs Act of 2017 advocated by President Donald J. Trump’s administration posed new challenges for states with a $10,000 per-family cap in state and local tax deductions.
However, the cap did not create a mass exodus from states with higher tax rates, as home prices rose 6.5 percent from the second quarter of 2017 to the second quarter of 2018 and prices rose in all states, Conning said.
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