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NJ credit rating drops on news of budget shortfall

Local News | May 02, 2014

NJ credit rating drops on news of budget shortfall

TRENTON, N.J. (AP) — New Jersey’s credit rating has been lowered one notch by Wall Street after the state announced an anticipated $807 budget shortfall.

Fitch Ratings dropped the state’s credit rating one step to A+ on news of the shortage announced this week, with two months to go in the fiscal year.

The agency cited the state’s use of one-time budget fixes and overly optimistic revenue projections.

Standard & Poors took similar action last month.

A third ratings agency, Moody’s, on Thursday described the state’s budget gap as a “credit-negative development.”

A lower credit rating signals caution to investors and results in higher borrowing costs to the state.

Gov. Chris Christie’s revenue projections have missed their targets for three straight years, forcing budget adjustments.

Christie must close the gap by June 30.

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