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October 6, 2021

Ratings agency upgrades economic outlook for New Haven

PHOTOS | New Haven BIZ Mayor Justin Elicker presents his 2020-21 budget proposal.

Anticipating an upswing in city finances, Fitch upgraded New Haven’s bond ratings ahead of nearly $100 million in offerings. 

Two sets of bonds — $54 million in series A 2021 general obligation bonds and $39 million of taxable series B —  were assigned BBB ratings. The agency upgraded New Haven’s ratings outlook from “stable” to “positive.”

The bond sales are scheduled for the week of Oct. 18, with the series A funding a slate of city and school improvements and the series B used to refinance a portion of the New Haven’s outstanding general obligation bonds to cut costs.

“The outlook revision to positive reflects the projected maintenance of adequate reserves through fiscal 2021 and improvement in city revenues primarily from the state’s revised PILOT [Payment in Lieu of Taxes] program, which will help absorb growth in city spending,” Fitch said in a statement.

Earlier this year, the state legislature passed a law to increase funding for New Haven and other cities through the PILOT program, designed to make up for tax revenues lost due to property held by nonprofits. New Haven expects a $49 million increase in PILOT money for 2022-23 as result of the measure.

Budgetary restraint along with added tax revenues in a booming real estate market expected after next year’s impending property revaluation also helped make Fitch bullish on New Haven.

“Fitch expects management will continue recent efforts to manage expenses in line with natural revenue growth despite upward pressure tied to growth in salaries, medical and pension benefits and debt service,” the company said. 

Mayor Justin Elicker took credit for the upgrade, saying in a statement, “Over the past year and a half we’ve taken many steps to get the city heading in the right direction and this upgrade shows that our efforts are bearing fruit. Capping new debt, increasing our annual pension contributions and working with our state partners to increase PILOT funding have put us on a new, more sustainable, path.”

Fitch said financial risks facing the city included growth in long-term liabilities associated with debt and retiree benefits and the potential of increased city spending in the face of declining revenues in a future economic downturn.

Contact Liese Klein at

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