Last week closed out with more welcome news on the state’s credit rating front as Moody’s Investors Services upgraded New Jersey’s outlook from stable to positive.
The Sept. 30 announcement follows a string of three credit ratings upgrades with a positive outlook from all four major credit rating agencies: Moody’s, S&P, Fitch and KBRA.
Gov. Phil Murphy, who despite the run of outlook and credit upgrades has cautioned about impending economic headwinds, welcomed the latest credit agency news.
“This recognition from Moody’s is further proof that the steps we’ve taken to right our fiscal ship have led to real progress,” said Murphy. “We are now better prepared to meet our present obligations and weather any uncertain economic conditions.”
“The positive outlook is supported by the likelihood the state will continue its current practices for managing reserves and long-term liabilities, which support improvement in the rating,” Moody’s said in announcing the change.
The agency also laid out a series of factors that could lead to a further upgrade, including continued commitment to maintaining pension contributions, implementing structurally balanced budgets, maintaining budget balances and liquidity above historic averages, reducing leverage metrics to levels more closely aligned with other states, and more.
State Sen. Paul Sarlo, D-36th District and chairman of the Senate Budget and Appropriations committee, described the announcement as an additional endorsement of actions taken to manage New Jersey’s finances during the pandemic and beyond.
“The upgrade is the productive result of responsible fiscal decisions,” he said in a statement. “We took a series of actions to improve the state’s fiscal health. We put in place the largest surplus in the state’s history, created a debt reduction plan, fully funded the pension system, made strategic infrastructure investments and were careful to avoid fiscal cliffs by funding vital services with sustained spending.”
Sarlo stressed that all of this was accomplished at the same time that the ANCHOR Property Tax Relief Program was launched.
“We took a multiyear with the budget to protect against any downturns in the economy, maintain fiscal stability and provide savings to the taxpayers,” said Sarlo.
“Receiving a positive outlook is encouraging because it tells us not only that the decisions we have made until this point are the right ones, but the direction we are headed in is equally promising,” said State Treasurer Elizabeth Maher Muoio. “Given the uncertain economic forecast, having a healthier surplus than the state has seen in decades should be a comfort to residents who rely on state services all the more during difficult economic times.”
“While we are proud of all we’ve accomplished thus far, we must continue making strides to improve our fiscal health and resilience,” said Murphy.