Some tough news for New Jersey today, as Moody's Investors Service announced it was downgrading the state's credit rating. New Jersey, which has $31 billion in outstanding debt, now has an Aa3 rating - the fourth-highest - on its general-obligation bonds, and A1, the fifth-highest rating, on its securities-backed bonds.
What does this mean? Moody's thinks that since New Jersey has seen a drop in its tax revenue and has had to use other revenue sources to meet its obligations, it will have a harder time paying off its debts in the future. if the long-term credit rating gets downgraded as well, the state will have to pay higher interest rates when it raises money by issuing bonds.
Maybe more importantly, it means that financial experts have combed through the fiscal data for our state and come away pessimistic. Moody's thinks there's a good likelihood that New Jersey's economic recovery may lag that of the nation as a whole. While the national economy has begun to look better lately, here at home, we still may have a tough hill to climb.
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