S&P Global Ratings has cut its credit grade for New Jersey's general-obligation bonds a notch, to A-.

The agency also warned it may cut again soon, if the state doesn't do a better job matching its spending, including teacher and police pensions, to its income, including sales and income taxes. New Jersey is spending, or promising to spend, $113 for every $100 the state collects in taxes, according to S&P.

The higher the credit rating, the less a borrower usually has to pay to get investors to buy its debt. New Jersey's low credit rating costs around 1 percentage point more than high-credit states like Maryland or Delaware, costing taxpayers $10 million a year on every $1 billion in new bonds issued.

Only Illinois, at BBB, has a lower S&P state rating than New Jersey. Pennsylvania ranks fourth-lowest, at AA-, with a "negative outlook." All three states pay public-sector retirees relatively generous pensions but haven't set aside tens of billions of dollars needed to keep the checks coming, S&P says.

S&P also cut ratings for other New Jersey state issuers, including for $1.3 billion in New Jersey Economic Development Authority school construction bonds, which it downgraded a notch to BBB+, with a continued "negative outlook." 

"State budget pressures will intensify in future years," noted S&P Global Ratings credit analyst David Hitchcock, in a statement explaining the rating cut.

Putting aside New Jersey's large pension expenses and the risk the economy could slow and tax collections fall, New Jersey's "revenue growth has not kept pace with rising costs," according to analyst Hitchcock.

State spending on public schools and colleges, Medicaid, bond interest and medical benefits to retired state workers have also "imbalanced" the budget, according to Hitchcock. New Jersey has "limited reserves" to pay its bills in case the economy slows further, he added.

New Jersey needs "credible pension reform," or a lot more pension funding -- so much it would make it hard to keep funding other programs, Hitchcock concluded.   

S&P state credit ratings, as of last week:

Alabama             AA/Stable
Alaska              AA+/Negative
Arizona              AA/Stable
Arkansas            AA/Stable
California          AA-/Stable
Colorado            AA/Stable
Connecticut         AA-/Stable
Delaware            AAA/Stable
Florida             AAA/Stable
Georgia             AAA/Stable
Hawaii              AA+/Stable
Idaho               AA+/Stable
Illinois            BBB/Negative
Indiana             AAA/Stable
Iowa                AAA/Stable
Kansas              AA-/Stable
Kentucky            A+/Stable
Louisiana           AA/Negative
Maine               AA/Stable
Maryland            AAA/Stable
Massachusetts       AA+/Negative
Michigan            AA-/Stable
Minnesota           AA+/Positive
Mississippi         AA/Stable
Missouri            AAA/Stable
Montana             AA/Stable
Nebraska            AAA/Stable
Nevada              AA/Stable
New Hampshire       AA/Stable
New Jersey          A-/Negative
New Mexico          AA/Negative
New York            AA+/Stable
North Carolina      AAA/Stable
North Dakota        AA+/Stable
Ohio                AA+/Stable
Oklahoma            AA+/Negative
Oregon              AA+/Stable
Pennsylvania        AA-/Negative
Rhode Island        AA/Stable
South Carolina      AA+/Stable
South Dakota        AAA/Stable
Tennessee           AAA/Stable
Texas               AAA/Stable
Utah                AAA/Stable
Vermont             AA+/Stable
Virginia            AAA/Stable
Washington          AA+/Stable
West Virginia       AA-/Stable
Wisconsin           AA/Stable
Wyoming             AAA/Negative
STATE            TO              FROM           DATE
New Mexico       AA/Negative     AA+/Negative   Nov. 10, 2016
Alaska           AA+/Negative    AA+/Watch Neg  Oct. 27, 2016
Alaska           AA+/Watch Neg   AA+/Negative   Oct. 7, 2016
Illinois         BBB/Negative    BBB+/Negative  Sept. 30, 2016
Hawaii           AA+/Stable      AA/Positive    Sept. 12, 2016