New Jersey’s bond rating has taken a hit.
Fitch Ratings has downgraded the state’s general obligation bonds to AA- from AA, the AP reports.
The agency also downgraded the rating on the state’s open space preservation bonds and its appropriations-backed debt.
Fitch cites increased pressure to pay for growing unfunded pension and health benefits liabilities, especially during a weak economic recovery. It also cited the state’s already high debt burden and a persistent structural budget deficit.
The rating agency recognizes landmark pension and health benefits legislation signed into law this year, but says it wasn’t enough.
The new law requires greater pension and health benefit contributions from employees at all levels of government.