New Jersey’s credit rating lowered to A+ by Standard & Poor’s
APRIL 9, 2014, 4:47 PM LAST UPDATED: WEDNESDAY, APRIL 9, 2014, 7:00 PM
BY HUGH R. MORLEY
STAFF WRITER
THE RECORD
Standard & Poor’s downgraded New Jersey’s credit rating Wednesday, saying that the state is dealing with a “structural imbalance” and its efforts to balance the budget will “contribute to future budgetary pressures.”
The ratings agency reduced the state’s general obligation debt one step, to A+ from AA-, lowered ratings for other kinds of debt, and offered unsparing criticism of the state’s financial position just over two weeks after Governor Christie released a $34.4 billion budget.
“Almost five years after the official start of the economic recovery, New Jersey continues to struggle with structural imbalance and stands in stark difference to many of its peers who registered sizeable budgetary surpluses in fiscal 2013,” the statement said.
It added that the state is now suffering from the effects of “bullish revenue assumption and overreliance on untested or uncertain revenues” in the past two budgets.
The downgrade puts the state’s grade four levels below the top, and leaves it with California and Illinois in the single-A category, lower than 47 other states, Bloomberg News reported. A lowered rating generally leads to higher borrowing costs.
At the same time the ratings agency gave New Jersey a stable outlook. S&P had held a negative outlook for New Jersey since September 2012.
– See more at: https://www.northjersey.com/news/new-jersey-s-credit-rating-lowered-to-a-by-standard-poor-s-1.877458#sthash.C8zwFwtz.dpuf
