S&P Downgrades Hartford's bond rating to 'BBB' - WFSB 3 Connecticut

S&P Downgrades Hartford's bond rating to 'BBB'

Posted: Updated:

Hartford's budget cap has grown to $22 million and now their bond rating has been downgraded. 

Standard & Poors dropped the rating from an "A" to a "BBB." 

"This is a situation, a problem hidden for years," said Hartford Mayor Luke Bronin. 

Bronin said he inherited a mess and now he's trying to fix it. 

The drop in the city's bond rating won't affect current projects, but will make future ones more expensive. 

Standard & Poors looks at a few things when they decide the bond rating. In Hartford's case, it may have been the city's budget deficit of $22 million, its ability to pay debt and interest on what it borrows and the threat of bankruptcy. 

"There was a pretty large downgrade so it means the city is losing its flexibility in its financial affairs," said Robert Porter, Quinnipiac University financial professor. 

Porter said a triple B is the lowest you can have and still be considered investment grade. If it drops lower, the city will be forced to use junk or high yields bonds to pay for future projects. 

Bronin said the city has scaled back on capitol projects. They've also made deep cuts and laid off 100 city employees. 

When he was running for mayor, the city's bond rating dropped to an "A-," he blamed his predecessor Pedro Segarra, saying it was about leadership. 

"I don't think there was enough honesty or transparency. There's one way to deal with a financial crisis; to hide it and pretend it's not there. I am not doing to do that," Bronin said. 

Bronin said one of the biggest challenges facing the city is that more than half the properties are tax exempt and until that changes, it will be nearly impossible for Hartford to be healthy. 

The mayor make make an appeal to state lawmakers this coming January to help Hartford turn things around. 

Copyright 2016 WFSB (Meredith Corporation). All rights reserved.