Fitch Ratings has lowered the bonds rating outlook for Connecticut and New Orleans, citing burdensome pension obligations among its reasons.
The general obligation bonds of both governments were assigned a negative outlook from Fitch. The outlook had been stable. Connecticut received a double-A rating on $900 million in bonds. New Orleans' rating was A- on $462 million worth of bonds.
While Fitch noted that Connecticut had instituted policies to improve funding of future pension obligations, it had one of the most poorly funded pension systems in the nation. Fitch said future pension liabilities equal 23.6 percent of 2012 personal income in the state, which has the nation's highest per capita income. Other factors cited in the negative outlook were a state budget that relies on short-term measures to fund it and the slow pace of the economic recovery.
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