Moody’s Investors Service has long been a bastion of economic warnings for people seeking safe harbors for their investments. They also pay close attention to local, state, and federal governments and their budgets. In a recent report released by Moody’s, they warned that Connecticut’s budget could face a weak economy for years to come. This could directly impact in home care support as well.
Some of the major issues that are plaguing the state right now include companies leaving for more appealing tax states, retirement benefit costs that are going to prove extremely difficult for the state to maintain, and a sluggish economy.
According to the CT Mirror, in the blog, Wall Street agency warns CT budgets will be bleak for years, written by Keith Phaneuf:
“A major Wall Street credit rating agency warned investors Wednesday that Connecticut’s weak economy and surging retirement benefit costs are likely to plague state budgets and test the state’s fiscal management for several years to come.
The latest issue paper from Moody’s Investors Service — part of a growing trend of Wall Street commentary on Connecticut’s troubled finances — also warns that while proposals to shift costs from the state to municipalities could help the state’s credit rating, it could hinder that of the cities and towns that would share in these expenses.”
Connecticut’s fixed costs consume about 30 percent of the entire state’s budget, ranking it the highest of all 50 states in the Union. Connecticut has lost population every year since 2013, making it one of just four states to face this challenge. Many of the issues that are driving residents out of the state are due directly to increased taxes and other issues compounded at the state government level.
This means as the state tries to figure out a solution, it may attempt to divert some of the financial responsibility from its coffers down to local municipalities, which are then going to have to find a way to make ends meet. It could also mean cuts may be inevitable to some programs.
While the in home care industry is growing, a significant portion of revenue is generated through Medicaid reimbursements and if those reimbursements have to be cut due to shrinking tax revenue, it could force numerous agencies into unprecedented waters.
Reports like the one from Moody’s highlight serious problems at state and local levels, not just in Connecticut but elsewhere. While the in home care industry is already grappling with financial challenges and proposed minimum wage increases moving through these states, there could soon be a time when seniors and the disabled struggle to find the basic care they require.