Standard & Poor's has lowered its credit rating for New Jersey down to A, from A+, potentially boosting costs for future borrowing by the state and agencies that rely on state funding. That leaves New Jersey worse than every place but Illinois (A-) among states S&P considers a bit most likely to fall behind on their debt payments.

Analyst John Sugden in a report to clients cited "increased long-term pressures in managing its long-term liabilities" and a "misalignment" between tax revenues and state spending due to "reduced funding" of state worker and public school pensions under Gov. Chris Christie and the state's Democratic legislature.

The cut comes two days after Christie, in a Monday press briefing, answered a question by my Inquirer colleague Andrew Seidman by dismissing concerns from rating agencies like S&P, Moody's and Fitch (which previously cut NJ): The agencies are "being significantly overaggressive because they were such bums back in '08 and '09 and left everybody hanging out to dry. So now they want to prove that they're not, because they're getting sued by everybody in the world for their bad reports before," the governor said.

"I don't know if they're any better now or just as inaccurate on the negative side as they were inaccurate on the positive side back five years ago. I don't pay a lot of attention to these guys. They get paid to give opinions. It's like reading the op-ed pages, you know? I don't spend a lot of time doing that either," Christie added. Leaving this question for taxpayers: Will bond buyers set New Jersey borrowing rates based on Christie's view, or the rating agencies'?

In its writedown, S&P also cited New Jersey's "trend of structurally unbalanced budgets" in which state politicians guarantee pensions for hundreds of thousands of public workers without investing enough money to pay for them, a "lack of consensus among elected leaders" on what to do about that, an "above average" state debt burden, and a state economy that despite "signs of improvement" still "has a long way to go to full recovery," even though it is one of the wealthiest in the U.S.

Christie's "decision to delay pension funding, while providing the necessary tools for cash management and budget control, has significant negative implications for the state's liability profile," Sugden added.

"Although in his State of the State and budget messages, the governor called for additional pension reform efforts, there has been no formal proposal released... The governor vetoed the legislature's proposals to increase taxes to continue to fund pensions; therefore, it is likely that any pension reform proposals will be primarily focused on changes to retirement and health benefits, rather than on increased funding.

"In the absence of consensus between the legislative and executive branches, any type of pension solution is likely to be delayed and result in mounting financial pressures for the state in the long term." Still, New Jersey remains rich and remains likely, over the years, to pay its bondholders in full, Sugden concluded.