Officials have said that a Wall Street agency has downgraded Connecticut's bond rating in response to steps state officials took to close a $1 billion budget deficit.

The Hartford Courant has reported that Fitch Ratings Friday lowered the state's general obligation bonds from AA+ with a negative outlook to AA with a stable outlook. The newspaper also said that the decision came after Gov. Jodi Rell and the state legislature decided to borrow funds to cover operating expenses and balance the budget.

The newspaper also said that the state has borrowed money for similar expenses in the past but the loan in question was arranged even before the beginning of the 2011 fiscal year July 1.

The report said that the downgrade could result in higher borrowing costs for Connecticut but rating agencies other than Fitch might reach a different conclusion about the state's creditworthiness.

The Courant also reported that the state's budget deficit for fiscal year 2012 is projected to be more than $3 billion.

The state has "failed to take meaningful action to address its growing fiscal crisis," said Lt. Gov. Michael Fedele, a Republican who is running for governor.

Fedele further said, "In order to avoid making hard decisions, the democratically controlled General Assembly has resorted to borrowing and fiscal gimmicks to supposedly close the budget gap. In reality, all they have done is to postpone the day of reckoning while the state's fiscal condition continues to weaken."

"We do not anticipate that it will have much impact, if any, on the state's cost of debt," said State Treasurer Denise Nappier, a Democrat, calling Fitch's decision disappointing. (With Inputs from Agencies)