Gov. Dannel P. Malloy is ruling out any thought of Connecticut declaring bankruptcy, despite the state’s deficit problems, saying the idea is wrong-minded and would endanger the municipal bond market, The Associated Press reports.
Malloy told reporters on Monday that it’s “crazy talk” to float the idea of states seeking bankruptcy protection.
While states are prevented from taking such an action, some like Illinois and California are facing fiscal situations so dire that bankruptcy has been discussed as a possible way to break union contracts and reconstitute their financial situations.
Malloy says the marketplace for state and local bonds would disappear if states began filing for bankruptcy.
Connecticut’s deficit for the new fiscal year is predicted to be $3.4 billion to $3.67 billion.
