Connecticut Gov. Dannel Malloy will not seek a third term, he said Thursday.
“Instead, I will focus all my attention and energy – I will use all of my political capital from now through the end of 2018 – to continue implementing my administration’s vision for a more sustainable and vibrant Connecticut economy,” Democrat Malloy said at a news conference at the state capitol in Hartford.
Connecticut’s economic struggle has contributed to a budget imbalance that triggered three general obligation bond rating downgrades last year.
S&P Global Ratings assigns its AA-minus rating and negative outlook. Fitch Ratings and Kroll Bond Rating Agency also assign AA-minus ratings, though with stable outlooks. Moody's Investors Service rates the bonds an equivalent Aa3 rating and negative.
“Among the wealthiest states by many measures, Connecticut has faced regular structural deficits in recent years, as its post-recession economic recovery lagged the nation’s,” said Alan Schankel, a managing director at Janney Capital Markets.
Moody’s, in a report last week, cited unfunded pension liabilities, retiree health care costs and bonded debt as challenges to Connecticut’s credit quality.
Malloy, 61 and a former Stamford mayor, narrowly defeated Republican businessman Tom Foley in 2010 and again four years later. Last November’s elections resulted in the GOP pulling even in the Senate, 18-18, while the Democrats’ advantage in the House of Representatives slipped to 79-72.
Remaining priorities, said Malloy, include a “fairer and more equitable system” for municipal education aid and his proposal for municipalities to share teacher retirement obligations.
“It means maintaining our commitment to better and more sustainable budget practices,” he said.
“We will not rely on gimmicks or one-time fixes, we will not push off debts that should be responsibly paid now, and we will not borrow to save ourselves from difficult but necessary reductions in spending.”
State Comptroller Kevin Lembo two weeks ago projected a $44.6 million deficit for the current state budget, which matched the forecast of the legislature’s nonpartisan Office of Fiscal Analysis.
Malloy’s administration, by contrast, projects a balanced budget.