Categories: General

QOD: About that $1.5 billion state pension payment…

From Mark Magyar at NJ Spotlight:

For the third time in three weeks, Wall Street gave a thumbs down to New Jersey’s fiscal management, as Fitch Ratings yesterday followed Standard and Poor’s in downgrading the state’s credit rating to single-A status — higher than only Illinois and California.

Fitch’s decision to downgrade New Jersey’s bond rating echoed S&P’s April 9 announcement in its criticism of the state’s growing pension and retiree healthcare liabilities, high levels of debt, overly optimistic revenue estimates, and reliance on one-shot gimmicks that add to future budget problems…

Furthermore, Fitch’s noted that the “belated” discovery of the new budget gap leaves Gov. Chris Christie and the Democratic-controlled Legislature with few options to fill the deficit by the June 30 end of the fiscal year: School aid, municipal aid, and homestead rebates are already paid out. Tax increases could not be implemented quickly enough — even if Christie had not taken a “no new taxes” pledge — nor could layoffs. That leaves the $1.558 billion pension payment the state is scheduled to make in late June as the only large expenditure that could be reduced or pushed off into the next fiscal year

Laura Waters

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