Fitch views this reversion to prior practices - cutting pension contributions as a way to balance the state's budget - as a form of deficit financing that is of particular credit concern at a time of economic recovery.
Fitch anticipated a stop-gap solution to close the budget gap for fiscal 2014 (now estimated at over
Fitch also notes that the proposal to reduce the state's already inadequate contributions to its pension systems would make the state's long-term liability challenge even larger. The proposal retreats from the state's statutory commitment to phase in increases in its contributions to the system to the full actuarially required contribution. This in turn would result in additional increases to the state's already high unfunded pension liability.
Fitch currently rates
Additional information is available on www.fitchratings.com.
Source: Fitch Ratings
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