CCM Statement in Response to New Report by Municipal Market Analytics
For immediate Release
Thursday, September 28, 2017
New report by Municipal Market Analytics states:
Should the city of Hartford actually default or be permitted to file for chapter 9 bankruptcy, other CT cities are likely to face somewhat higher borrowing costs going forward. A default on the upcoming Halloween note maturity or regular debt service default would, in its potential curability, be less disruptive than a full blown chapter 9 bankruptcy or more permanent repudiation attempts.
In those latter cases, larger, more stressed cities like New Haven, could temporarily (for a month or so) lose access to the traditional, high grade bond market. Similarly, the State of CT would reasonably see its own borrowing costs rise as investors (rightly) assume that a Hartford bankruptcy hastens the state’s ongoing economic contraction, further hinders the state budget’s ability to fully fund long-term pension costs, and invites progressive ratings downgrades.
CCM statement in response back to top
This report only serves to reinforce the urgent need and value of providing the increased state aid to Hartford that will allow it to achieve a balanced budget for the current fiscal year and avoid insolvency.
Hartford insolvency will have a residual negative impact on other distressed urban centers (and distressed small communities) as well as the state government overall and their access to the credit markets. That unacceptable conclusion should motivate all parties to -- as soon as possible -- resolve the state budget impasse in a bi-partisan manner that protects the interests of towns and cities and their property taxpayers, as well as the state government.