Fitch Ratings, one of the three biggest rating agencies, has downgraded New Haven’s outstanding bonds.
The agency gave the approximately $500 million in outstanding general obligation bonds a rating of ‘A-,’ down from ‘A.’
Fitch kept its negative rating outlook for the bonds, citing the city’s weakened financial flexibility, reliance on state aid, exposure to school deficits, below-average wealth levels and high unemployment.
Fitch noted that New Haven’s government has made progress in balancing its fiscal 2014 budget without one-time revenue and has made progress on labor negotiation, but said pent-up salary pressures from unsettled contracts and increasing pension costs could impair its future ability to balance budgets and restore reserves.
