New Jersey’s bond rating was downgraded on Thursday over the state’s pension contribution shortfall, marking the ninth time since Gov. Chris Christie took office in 2010 that a major agency has lowered its rating for the state.
The action and the reason for it are familiar. So is the aftermath: The Republican governor calling on the Legislature to agree to a second overhaul of the pension and benefit system for public workers in five years, while the Democratic Senate president is criticizing the governor for not fulfilling promises to fund the pension.
Moody’s Investor Service also acknowledged “some stabilization” in the state budget’s performance and the state’s economy. The new rating, A2, is a step lower than the previous A1. But the firm still considers New Jersey bonds a sound investment. The change could mean the state has to pay higher interest rates.