S&P Global Ratings on Wednesday became the third of the three major credit ratings to upgrade the rating on New Jersey’s general obligation bonds one level.
S&P moved the state from “A-” to “A,” its second upgrade from S&P in a little over a year. S&P, which downgraded the state to “BBB+” in November 2020, upgraded the state to “A-” in March 2022.
In raising the state’s rating, S&P cited the proposed third full pension payment in three years.
“The upgrades reflect better pension funding levels and improved structural balance, largely the result of an anticipated third consecutive year of full actuarial pension contributions in fiscal 2024,” S&P noted in its release.
The agency also took note of the budget’s structural balance, increased surplus and the reduction of one-shot revenue items.
Gov. Phil Murphy obviously was thrilled.
“Today’s upgrade from S&P is welcome news, coming as it does on the heels of the announcements from Fitch and Moody’s and is just more evidence that New Jersey is on the right fiscal path,” he said. “We’ve worked hard since Day One to change the narrative in Trenton from one of financial distress to one of fiscal responsibility, and that work shows in these upgrades.”
Treasurer Elizabeth Maher Muoio shared his enthusiasm.
“When we talk about fiscal responsibility, it’s not just lip service, it’s something we constantly strive for,” she said. “We owe it to the taxpayers of New Jersey to be good stewards of their money and with these upgrades it shows we’re doing just that.”