Moody's Investor Service announced it has placed 26 Connecticut municipalities and three regional school districts under review for a possible downgrade. 

Another 25 cities and towns and three regional school districts were assigned negative outlooks.  Among those listed is two bonds in New Fairfield , three held by New Milford and four in Oxford. Moody's notes how the state has historically provided cities and towns with significant amounts of funding, largely education grants.  The rating agency cited the state's budget impasse and the vulnerability of state aid to municipalities. 

Last week, Standard & Poor's Global Ratings downgraded its outlook for the state's general obligation bonds to "negative," while keeping the rating at A-plus. 

The Connecticut Conference of Small Towns is still unhappy with Governor Malloy's latest budget offering, calling it "a swing and a miss" for shifting teacher pension costs to municipalities "in a way that will overwhelm property taxpayers."

The Connecticut Conference of Municipalities says Moody's action will have a devastating impact.