Connecticut Sees Two Credit Rating Upgrades Amid Fiscal Gains

by Mia Palazzo

HARTFORD, CT – Connecticut’s bond ratings received upgrades from two of the nation’s top credit rating agencies, Gov. Ned Lamont and state Treasurer Erick Russell announced Wednesday.

Russell said the state has made “significant strides” in improving its fiscal health.

“One big piece of that, if you think about the progress we’ve made with balanced budgets, with surpluses, with over 18% of budget in a rainy day fund, it’s also been about addressing our unfunded pension liabilities, which, following the close of this fiscal year, will have likely … made over $10 billion in additional contributions toward our pension funds,” Russell said.

He added that the state’s pension fund “performed at 10.14% for fiscal year 2025” and that “with that 10.1% return, we added $5.9 billion of increased value to our pension fund.”

Russell said he was proud to announce that the state had just received credit rating upgrades from two agencies: Moody’s upgraded Connecticut from Aa3 to Aa2, and Fitch upgraded the state from AA- to AA.

Lamont congratulated Russell and the state’s investment team, acknowledging that this is a “turnaround,” with the upgrades strengthening pensions for employees and teachers, noting that funding levels have climbed to around 60%.

Lamont added the state’s annual required contribution is now hundreds of millions lower, freeing money for investments in the future. He also pointed to the state’s recent streak of seven upgrades in six years, contrasting it with a federal downgrade.

The administration has credited fiscal guardrails and steady contributions to the state’s long-term obligations as key drivers of the improved ratings. Officials have also emphasized that higher bond ratings lower borrowing costs, saving the state money on future projects.

Connecticut’s rainy day fund now stands at more than 18% of the budget, the highest in state history, according to state officials. That reserve, combined with surplus budgets, has allowed the state to make extra payments toward its pension liabilities.

Russell’s office said the treasurer’s office plans to enter the market later this month with more than $1.8 billion in general obligation bonds, including new projects and refinancing bonds to capture savings through lower interest rates.

“When I talk to these companies, they say, I’m going to take a second look at Connecticut,” Lamont said. “We’re still below average, way above average in terms of performance … We’re making extraordinary progress there, and I think it does make a difference.”

House Minority Leader Vincent Candelora, R-North Branford, responded to the announcement via email.

“While the credit rating increase is welcome news, the Governor’s claim that ‘Connecticut is back’ rings hollow for residents struggling with the state’s high cost of living – especially when they’re only able to count on federal tax relief, something General Assembly Democrats refuse to provide.”