New Jersey’s been officially downgraded — again.Moody’s Investors Service announced Tuesday that it had also downgraded New Jersey’s credit rating, joining Fitch Ratings and Standard & Poor’s as the third to do so within the last few months.
The latest downgrade takes New Jersey’s general obligation debt from Aa3 to A1 and forecasts the state’s fiscal outlook as negative.
The move comes just weeks after Gov. Chris Christie’s administration announced that a tax revenue shortfall of $807 million exists for the current fiscal year.
According to Moody’s, the downgrade is attributed to the state’s weak financial situation that has developed from “recurring revenue shortfalls and ongoing reliance on non-recurring resources that have deferred structural imbalances into future years.”
The outlook is a reflection of the concern that budget solutions will only become more difficult to achieve in fiscal year 2015 and beyond due to the state’s “structural imbalance,” Moody’s said.
“Combined with its sluggish economic recovery and the ongoing pressure of statutorily scheduled pension contribution increases, the state will be challenged to restore its weak liquidity position,” Moody’s noted.
In April, S&P dropped the state’s credit rating from AA- to A . Fitch followed by doing the same earlier this month.
For Christie, who is scheduled to speak Wednesday on economic issues at the Peter G. Peterson Foundation Fiscal Summit in Washington, D.C., the latest Moody’s report marks the sixth credit rating downgrade since he has taken office.
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