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New Jersey’s fiscal health got a shot in the arm Sept. 12, with Fitch Ratings announcing an upgrade of the state’s credit rating on general obligation bonds from A- to A, while maintaining its outlook at positive.
The credit rating upgrade is New Jersey’s third in the last year. It is the first time Fitch has upgraded New Jersey since it started rating the state in 1992.
“The upgrade of New Jersey’s IDR to ‘A’/Positive Outlook reflects Fitch’s view that the strong fiscal momentum of recent years and consistent policy actions to confront its long-term fiscal and liability challenges reflect a notable improvement in budget management,” Fitch wrote in its analysis.
The credit ratings agency says those steps have drastically improved the state’s near-term resilience and will likely yield further gains going forward.
“A solid economic rebound, robust revenue collections and the presence of federal support have enabled it to build a sizable fiscal cushion, while simultaneously addressing high debt and pension liabilities and considerable unmet capital needs,” Fitch said.
The ratings agency wrote that New Jersey benefits from very high wealth; broad budget management prerogatives; a varied, diverse economy; and its geography. It also notes that the Garden State continues to face challenges from very high liabilities and elevated carrying costs, which constrain the state’s budget choices.
“We’ve made remarkable strides to get our fiscal house in order, from making our full pension payments two years in a row to building a strong, reliable surplus that will help our state weather potential storms,” Gov. Phil Murphy said. “There’s no doubt our fiscal position is far stronger than the situation we inherited, and we’re committed to continuing on this path to a more resilient, affordable New Jersey.”
Maher Muoio
State Treasurer Elizabeth Maher Muoio said that Garden State today finds itself on more solid fiscal footing than even before the pandemic and many years prior.
“We took advantage of our state’s solid economic recovery to invest in New Jersey’s future, including paying down debt and fulfilling our obligations,” said Maher Muoio. “We’re proud of this progress, as evidenced by upgrades from three of the major ratings agencies.”
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September 12, 2022
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