The downgrading of New Jersey's credit rating May 1 by Fitch Ratings, which cited the Christie administration's reliance on "overly optimistic revenue forecasts," does not bode well for the governor's fading presidential hopes as the state's financial woes do not square well with Christie's profile as a fiscal conservative.
More to the point for New Jersey residents, the downgrade means it will cost taxpayers more in interest when the state borrows money. And that is almost a certainty in light of the recent announcement of a $807 million budget shortfall as a result of lagging tax collections.
"The state's likely use of stop-gap measures to close the gap prior to the fiscal year ending on June 30, 2014, exacerbates in Fitch's view the strained financial environment in which the state operates," the rating agency said.
As indicated in an earlier article in CMC Digest, State of the State, New Jersey's fiscal condition is not in good shape as a result of bond issues it cannot pay for and the underfunding of pensions over a period of years by the current and former governors.
It didn't take long for the state's Senate Budget Committee Chairman, Paul Sarlo, D-Bergen, to take the governor to task, according to the Asbury Park Press. "This is another bad grade for New Jersey that is a direct result of the governor's fiscal practices," Sarlo said. "It's time for the governor to take off the rose-colored glasses, stop bragging about fantasy balanced budgets and produce a realistic and responsible spending plan."