Standard and Poor’s has lowered its credit outlook for New Jersey from stable to negative, dealing yet another blow to the state’s financial status and Republican Gov. Chris Christie’s tax relief plans.
The outlook released Tuesday followed several other hits on New Jersey from the nation’s credit-rating agencies in recent days, the Newark Star-Ledger
Standard & Poor’s didn’t change its AA- rating for the state, which remains one of the worst in the country, but said a lower rating could still happen if Christie’s projected 8 percent revenue growth this year doesn't pan out.
John Sugden, a credit analyst for Standard & Poor’s, said the outlook was revised to reflect longer-term expenditure pressures. These include increases in financing the state’s public pensions, higher Medicaid costs, and the rising cost of paying off the state’s debt.
Christie, though, is continuing his call for an income tax cut, calling it a “joke” that Democrats haven’t yet approved his plans.
Standard & Poor’s decision followed reports from two Wall Street firms, Moody’s and Fitch, which didn’t change the state’s credit rating but predicted its economic recovery would continue to trail the rest of the nation.
State treasury spokesman Andy Pratt said it was “gratifying” the three agencies all affirmed the state’s credit rating, but said Standard and Poor’s decision to lower its outlook will eventually prove incorrect.
"We believe investors will find S&P’s arguments to be out of step and its basis for revising New Jersey’s outlook unconvincing, particularly in the face of the continued growth in New Jersey’s economy and state revenues," he said.
Meanwhile, Christie’s boasts of a “Jersey Comeback” have not come through, with the state’s revenue falling short, unemployment on the rise and foreclosures continuing to hinder the real estate market, the Star Ledger reported.
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