Fitch Ratings — saying the state is well-positioned in the near term to continue progress on its longer-term fiscal challenges — upgraded the outlook for New Jersey’s general obligation bonds from “negative” to “positive” Thursday.
Fitch Ratings stated its outlook upgrade reflects the rapid turnaround in the state’s fiscal condition as it recovers from the coronavirus pandemic.
“A solid economic rebound, state balancing actions during the pandemic and multiple rounds of federal assistance are now providing the state with both a solid financial cushion and extra capacity to accelerate progress on its high liabilities,” Fitch Ratings said in its report.
“Fitch views the state as being well-positioned in the near term to continue progress on its longer-term fiscal challenges while managing through current uncertainties, including the lingering effects of the pandemic and duration of the strong economic and revenue rebound it is currently experiencing.”
In addition to the general obligation bonds, Fitch Ratings also upgraded the outlook to “positive” for a host of other debt issued by the state, including; New Jersey Economic Development Authority annual appropriation bonds; New Jersey Transportation Trust Fund Authority annual appropriation bonds; New Jersey Building Authority annual appropriation bonds; New Jersey Educational Facilities Authority annual appropriation bonds; New Jersey Health Care Facilities Financing Authority annual appropriation bonds; and New Jersey Sports and Exposition Authority annual appropriation bonds.
This outlook upgrade comes within a month of Moody’s Investors Service and S&P Global Ratings upgrading their outlooks for the state from “stable” to “positive.”
Gov. Phil Murphy, in a statement released by his administration, said the news was “gratifying.”
“It is incredibly gratifying to see, for the third time in a month, rating agencies acknowledging that the decisions made by our administration, the treasurer’s team and our partners in the Legislature have put New Jersey on the right path to a full economic recovery,” he said.
“We have not and will not squander this opportunity to tackle the remaining fiscal challenges New Jersey faces, and we will continue to invest in the people of New Jersey. By making the first full pension contribution in 25 years, and by making strides in tackling health care costs, bolstering our surplus and avoiding future debt issuance, we have momentum working in our favor.”
State Treasurer Elizabeth Maher Muoio also praised the decision, saying it was the result of years of work.
“Since assuming office in 2018, the Murphy administration has approached improving the state’s economic health through the lens of fiscal responsibility and long-term prosperity,” she said. “Despite the unprecedented challenges spurred by the COVID-19 pandemic, we kept our commitment to New Jersey taxpayers to build a fairer and more equitable economy for all by making record pension payments, controlling debt and pursuing reliable and recurring revenue sources.
“These steps will ensure New Jersey is on solid fiscal footing to tackle any future challenges that may come our way.”
