New Jersey Reduced One Level to A by Fitch on Budget DeficitMichelle Kaske
New Jersey had its credit rating cut one step to A by Fitch Ratings, which cited the lack of progress in fixing budget gaps.
The grade is the sixth-highest ranking from New York-based Fitch, which maintained a negative outlook on the state. New Jersey has reduced required pension payments to help balance budgets after revenue collections came in below forecast.
The downgrade “incorporates the absence of long-term, fiscally sustainable solutions to close identified budget gaps in fiscal years 2014 and 2015,” Marcy Block, a Fitch analyst, wrote in a report.
Fitch’s move leaves New Jersey’s credit grade one step above that of Illinois, the lowest-rated U.S. state.
The move “acknowledges what Governor Christie has emphasized daily since his budget message last February: New Jersey needs additional, long-term, fiscally sustainable solutions to address the state’s considerable debt obligations and significant unfunded retirement liabilities,” Christopher Santarelli, a spokesmen for the state treasurer’s office, said in an e-mail.