Moody's Ratings Wednesday revised New Jersey's outlook to positive from stable and affirmed the state's A1 issuer rating.
"The revision to a positive from stable outlook incorporates prospects for strong economic and revenue performance that will allow the state to narrow its structural gap and retain substantial budgetary reserves," the rating report said, "while maintaining full actuarial pension contributions in fiscal 2026."
New Jersey's bond programs with an A2 rating — the New Jersey Municipal Qualified Bond Program, the New Jersey Qualified School Bond Program and the New Jersey County College Enhancement Bond Program Chapter 12 — were affirmed, and were also revised to a positive outlook.
The rating action comes ahead of the state's plans to issue New Jersey Transportation Trust Fund Authority transportation program bonds, which Moody's rated A2.
The report noted that New Jersey's economy has outpaced its neighboring states' economies, and that the state has been limiting bonded debt in recent years.
The federal support for New Jersey's
"New Jersey has among the highest ratios of long-term liabilities to revenue among states, because of its deeply underfunded retirement benefit plans," the report said.
The rating suggests that New Jersey is well positioned for responsible fiscal governance.
"Although the state is expending $2.4 billion of its surplus balance to help address a structural gap," the report said, "it still expects to end the current year with a significantly bigger balance as a share of budget than it has historically maintained."
New Jersey GOs carry ratings of A-plus with a stable outlook by Kroll Bond Rating Agency, affirmed Tuesday; A with stable outlook by S&P Global Ratings; and A-plus with stable outlook by Fitch Ratings.
