Bloomberg Tax
Free Newsletter Sign Up
Bloomberg Tax
Welcome
Go
Free Newsletter Sign Up

Connecticut’s Deficit Shrinks and So Does its Bond Risk Premium

Nov. 17, 2020, 6:30 PM

Connecticut’s deficit is shrinking and so is the risk premium on its bonds.

The state’s deficit has shrunk to less than $1 billion in the current fiscal year from an estimated $2.1 billion in mid August as surging U.S stock markets boost capital gains tax revenue and levies on partnerships. Like all states, Connecticut has also benefited from federal stimulus measures like enhanced unemployment benefits and small businesses loans.

The gap between the yield on Connecticut’s 10-year debt and the AAA benchmark has narrowed to about 0.4 percentage point, the lowest since early March, before states in the northeast shutdown ...