By Keith M. Phaneuf / CT MIRROR
While the partisan debate over GE’s departure from Connecticut continues, a major Wall Street rating agency sees a correlation between the company’s move and the state’s ongoing fiscal and economic woes.
Moody’s Investors Service cited the impending move as it issued a “credit negative” — not a formal rating downgrade — but rather a public statement about a development that could harm Connecticut’s financial standing in the long run.
“The news is a credit negative for the state of Connecticut and it underscores the challenges the state faces as its revenues and economy continue to underperform,” Moody’s wrote on January 21, in its weekly credit outlook.
GE announced on Jan. 13 that it would move its Fairfield headquarters to Boston over the next two years. Moody’s called the departure “a slight credit negative” for Fairfield, but added, “the town should be able to absorb the loss with its diverse tax base and favorable long-term prospects.”
The legislature’s Democratic majority has insisted GE’s move was driven by Boston’s cosmopolitan setting and the technologically advanced workforce produced by its cluster of superb colleges and universities.
Republicans counter that Connecticut’s recent major tax hikes — and its huge debt that threatens to raise taxes even further over the next decade — pushed GE out the door.
Gov. Dannel P. Malloy, also a Democrat, has been more nuanced in his assessment, stressing the advantages of Boston while acknowledging some of Connecticut’s fiscal challenges.