TRENTON - A downward revision by the credit rating agency Moody's of its outlook on New Jersey debt drew expressions of concern from a key Democratic lawmaker and pushback from the Christie administration Wednesday.
Moody's on Tuesday retained an Aa3 rating on New Jersey's outstanding general obligation bonds, but revised the state's outlook to negative from stable.
The agency said the negative outlook reflects "the expectation that the state will face challenges in improving its very weak liquidity position, due to the state's sluggish economic recovery, which has hindered revenue performance, and the ongoing pressure of statutorily scheduled pension contribution increases."
The revised outlook also takes into account "the lack of a specific plan to rebuild liquidity and fund balances."
In response, William Quinn, spokesman for the state Treasury Department, said, "The Moody's outlook does not change the state's Aa3 credit rating. But the review is flawed in that it does not give adequate weight to critical, positive factors.
"The uptick in the state's tax revenues that we saw in November is just one of a growing number of positive signs for New Jersey's economy," Quinn said.
"Moody's also noted that over the last year, the state has posted a record of 11 consecutive months of job gains in line with the national average and has reduced its overall unemployment rate by 1.2" percentage points, he said.
"With the last three years of increases in annual pension funding, the state is also acting responsibly in dealing with its long-term liability issues," he said. "We believe all of these developments . . . support a positive rather than a negative outlook for our future."
But a member of the Assembly Budget Committee said the Moody's report flags difficult choices ahead.
"What they [Moody's] are seeing is what we already know," said Assemblyman John Burzicelli (D., Gloucester), who is also chairman of the Appropriations Committee.
"We have an obligation to make a payment again [into state pension funds] against a revenue stream that has not grown significantly," he said, "so you have a tremendous drain on the budget.
"It is going to be very difficult," Burzicelli said. "There is only so much revenue and so many pressing areas on what the revenue will be spent on with no expected revenue growth.
"Last year's budget closed below the governor's expectations, and this year has not been robust, or at a pace we need," he said.
"I don't know where that money will come from," Burzicelli said. "It will have to come from not one place but many places, and it will be painful.
"People will have to raise their voices as to what priorities will be important to them, and what they can do without until the economy improves."