For the third time in a month, a Wall Street rating agency has upgraded New Jersey’s credit outlook.
Citing the “rapid turnaround in the state’s fiscal condition as it recovers from the pandemic,” Fitch Ratings said Thursday it was changing the outlook for New Jersey’s general obligation bonds from negative to positive.
In July, both Moody’s Investors Service and S&P Global also changed their outlook for the state’s general obligation debt, upgrading it from stable to positive.
“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 said.
Fitch said the state was now “well-positioned in the near term to continue progress on its longer-term fiscal challenges.” However, the ratings agency noted that New Jersey still has “high carrying costs” and noted that as of 2020 the state’s combined burden of debt and net pension liabilities is third highest among U.S. at 21.4% of 2019 personal income, well above the 5% U.S. state median.
In addition to the general obligation bonds, Fitch Ratings also upgraded the outlook to positive for 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.
“We’ve made significant progress toward our goal of building a stronger fiscal house for every New Jersey family,” said acting Governor Sheila Oliver.
