Nov
04

Hedge-Fund State Stung as Stock-Price Swings Leave Budget Gap

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  • Connecticut faces $118 million deficit four months into year
  • Bond yields most in almost three years against bechmark debt

Connecticut passed a budget in June that boosted funding for transportation projects, made required pension contributions and scaled back a tax increase on businesses. It appeared balanced, removing the risk of a downgrade from Fitch Ratings.

The good news didn’t last long.

Four months into the fiscal year, Connecticut is facing a $118 million deficit, thanks in part to a stock-market slide that erased more than $3 trillion from share prices before it ended in late September. With just $406 million in its rainy-day fund, about one-third of the pre-recession peak, Democratic Governor Dannel Malloy and lawmakers are working this week to figure out how to shore up the finances of a state that’s home to more hedge-fund money than any state but New York…

Hedge-Fund State Stung as Stock-Price Swings Leave Budget Gap

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