Ratings agency Standard & Poor's downgraded New Jersey bon d rating by one notch to “AA-“ from “AA” (both with stable outlooks).
The lower rating reflects our concern regarding the stresses from the state's poorly funded pension system, substantial post-employment benefit obligations and above-average debt levels, Standard & Poor's credit analyst Jeffrey Panger said in a report.
S&P also referred to how New Jersey’s health care and other retirement benefits for public workers place greater pressure on the state’s budget.
Many states in the country are in the same boat as New Jersey – tax revenues are declining while pension and health costs are rising, leading to severe spending cuts and massive job losses in the public sector.
New Jersey Governor Chris Christie blamed the downgrade on the state legislature's sluggishness in passing his proposed pension and benefit cuts.
For five months, the Legislature has dallied, he was quoted as saying.
Noting that Democratic lawmakers have called him Chicken Little, he added: Well, the sky started to fall in today, because now when we need to borrow money to keep government going, to do long-term capital projects, it's now going to cost us more to borrow because we've been downgraded, because they in the Legislature have acted for the special interests and not for the public interests.
Assembly Majority Leader Joe Cryan, a Democrat, replied to the governor through a statement: The Assembly is not about to be lectured by a governor whose budget policies have led to massive property tax hikes and a ballooning pension deficit. It's time for this governor to be held accountable for his actions and stop blaming everyone else.