New Jersey Gov. Chris Christie plans to restore $139 million of aid to financially distressed cities.
The Republican governor in June had eliminated the funds with a line-item veto, leaving just $10 million of so-called transitional aid for Newark, Camden and other cities. He said he had no choice since Democrats had removed language about oversight.
After Christie announced the cuts, Moody’s Investors Service placed six municipalities on review for possible downgrade. It cited Trenton, A3 with a negative outlook; Camden, Ba2 and stable; and Paterson, Baa1, as having reduced flexibility to manage the cuts. Also on review were East Orange at A2, Passaic at A1, and Union at A3.
Christie last week sent a bill to the legislature that restores the funds but also requires financial controls he said will assure that cities use the money properly.
Moody’s rates New Jersey’s general obligation bonds Aa3. Standard & Poor’s and Fitch Ratings rate them AA-minus and AA, respectively.