November 13, 2017

Moody's: CT budget 'adds to challenges' for UConn

UConn President Susan Herbst.

Connecticut's new $41.3 billion budget will be "credit negative" for UConn even though it is "credit positive" for the state as a whole, according to Moody's Investors Service.

The budget's passage is favorable for the state "because it restores revenue expenditure predictability" in state aid for municipalities. It also puts into place improved financial management measures, according to Moody's analyst Joseph Manoleas.

In contrast, UConn, whose credit rating had been downgraded to Aa3 negative in July because of its financial reliance on the state, has a "credit negative," outlook. The budgeted $107 million in cuts to the university "adds to near-term operating challenges," Manoleas said in his Nov. 9 report.

The reductions are higher than the $70 million in cuts UConn planned for in its approved 2018 budget, the analyst noted.

UConn President Susan Herbst has said the university will institute several measures to cope with the cuts, including a hiring freeze, restructuring of administrative positions and departments and some service reductions. Some positions could be eliminated.

UConn could not be reached immediately for comment.

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