July 17, 2017

S&P: CT's debt making it tough to fund transportation improvements

Drivers on Interstate 84.

Connecticut is one of three states in which debt service expenditures are at high levels, making it a challenge to fund transportation improvements that can lead to economic growth, according to a new report by S&P Global Ratings.

New Jersey and Illinois are the other two states struggling to fund transportation infrastructure with high debt levels, according to the report's author, Chicago-based primary credit analyst Carol H. Spain.

Across the U.S., but particularly in these three states, "restrained debt growth combined with slow revenue growth and rising expenditures has served to limit funds available for infrastructure investment," wrote Spain. "Although delaying or underfunding capital programs can provide short-term budgetary relief, it is not sustainable."

Connecticut's debt exceeded $22.2 billion in fiscal year 2016, or about 3 percent of general spending, the report states. Unlike New Jersey, however, since 2012, neither Connecticut nor Illinois have enacted transportation fee increases to counteract limited investment in transportation infrastructure.

Again referring to most U.S. states, Spain, says given existing budgetary deficits heading into fiscal 2018, "we expect state officials will continue to find it difficult to balance infrastructure funding against other spending priorities in an overall environment of fiscal restraint."

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