Connecticut is struggling with a projected two-year, $5 billion budget deficit, while its capital city is on the brink of bankruptcy. But there is at least one piece of good fiscal news coming out of New Haven.
Standard & Poor's Global Ratings has given New Haven an A-minus rating with a positive outlook just in time for the city’s planned sale of tax anticipation notes.
Those are notes issued by the city to finance operations before tax revenues are received. Once New Haven collects the taxes the revenue is then used to pay back the debt.
New Haven Mayor Toni Harp said the sale will help the city meet short-term cash flow needs by enabling them to pay pension contributions in one lump sum, and will ultimately save the city money.
“We were paying our pension payments over a number of months, and it was actually costing us about $1.5 million more per year,” Harp said. “We’re saving the taxpayers the $1.5 million by borrowing the dollars now to pay it. Then we’ll repay it at a much lower interest rate.”
Despite persistent uncertainty about municipal aid in the state budget, Harp said the positive rating shows the Elm City is a sound and stable investment.