New Jersey’s Bond Rating Cut by Standard & Poor’s

Posted on February 9, 2011. Filed under: Uncategorized |

No big shock here – we’ve been talking about this potentially happening for quite some time now. And so it begins!

New Jersey’s Standard & Poor’s bond rating just dropped by one notch, from AA to AA-. The culprit?

The state’s “growing pension and healthcare obligations.”

Gov. Christie is now urging his legislature to approve his proposals to begin to remedy the situation, including: “reverse a 9 percent benefit increase approved in 2001, raise the retirement age, and freeze annual cost-of-living increases.”

New Jersey’s pension-funding deficit increased by $8.05 billion last June, and the state “also faces an unfunded liability of $66.8 billion for providing medical care to retired public employees,” according to the treasury.

New Jersey’s bond rating downgrade is Standard & Poor’s first since cutting California’s in January 2010.

Read the article.

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