ELIZABETH, NJ (WCBS/AP) — Another rating agency has some bad news for New Jersey.
Fitch Ratings has downgraded New Jersey’s general obligation bonds to AA- from AA.
LISTEN: WCBS 880’s Levon Putney reports
The agency also downgraded the rating on the state’s open space preservation bonds and its appropriations-backed debt.
The downgrade came as no surprise to Gov. Chris Christie, but says it would’ve been different had Fitch not mentioned how the state cut spending and reformed pension and health benefits.
“They gave us credit for the pension and benefit reform that we passed this year,” said Christie. “Imagine if we hadn’t passed that pension and benefit reform, what that report would have looked like.”
But the report also noted the state’s budget remains structurally unbalanced, for which Christie blamed past fiscal mismanagement.
He admits this may mean the state will pay higher interest rates in the short-term, but says New Jersey pays its bills.
Fitch is the third rating agency this year to downgrade the state’s bond rating but the first to do so since the Legislature passed the landmark pension and health benefits legislation.
Moody’s cut the state’s bond rating one notch in April, citing the slow economic recovery and mounting employee retirement costs.
Standard & Poor’s cut its rating in February, making New Jersey’s credit rating among the lowest of all the states.
What do you think about the downgrade? Sound off below in our comments section…