S&P downgrades New Jersey as pension reform inaction continues

By The Staff | The Save Jersey Blog

Trenton StatehouseRecord pension payments haven’t won over a key credit agency.

S&P assigned a ‘negative’ outlook to New Jersey in its latest analysis, Save Jerseyans, explaining how the downgrade “reflects our view of the significant long-term pressures the state is under related to its postemployment benefits and the potential for New Jersey’s situation to worsen over the next year or two based on current litigation and proposed legislation.”

“It also reflects weakened pension funded levels due to pension underfunding and lower-than-assumed rates of return,” S&P analyst John Sugden explained in his institution’s report released Tuesday.

Governor Christie’s calls for additional pension reforms have gone unheeded as the race for the 2017 Democrat gubernatorial nomination (and the public sector union support needed to win it) heats up. At least one proposal is on the table to beef up the FY 2017 contribution by another $500 million.