S&P Global Ratings affirmed its BBB+ rating on New Jersey's outstanding long-term debt and gave a BBB+ rating for the upcoming issuance of $400 million in general obligation bonds.
S&P added that the outlook on all New Jersey bonds is stable. The outlook "reflects high income levels and forecast economic growth in 2022," said an S&P report issued Tuesday.
"Our rating on New Jersey reflects expected large structural imbalances, notwithstanding the governor's proposal to contribute the state's full annual actuarial contribution to its pension fund for the first time in 25 years in fiscal 2022," David Hitchcock, an S&P Global Ratings credit analyst, said in a S&P news release.
In February, Gov. Phil Murphy proposed a budget for the fiscal year starting July 1 that would include a $6.4 billion state contribution to the New Jersey Pension Fund, Trenton. The proposal, which requires legislative approval, consists of money from general revenues as well as proceeds the state's lottery. The state pension contribution for the current fiscal year is slated to be $4.7 billion, and three quarterly payments have been made.
The S&P comments follow an April 9 report by Moody's Investors Service, which reaffirmed its A3 bond rating for New Jersey and gave an A3 rating for the $400 million in general obligation bonds. Moody's also raised its outlook to stable from negative.