Rising pension liabilities landed New Jersey its second downgrade in less than four months Monday, with Moody's Investors Service dropping the state's general obligation bonds one notch to A3 from A2.

"The downgrade to A3 reflects the continued negative impact of significant pension underfunding, including growth in the state's large long-term liabilities, a persistent structural imbalance, and weak fund balances," Moody's analyst Baye Larsen wrote in a report released late Monday. "Despite the state's significant increases in pension contributions since fiscal 2012, contributions remain well below the actuarial recommended contribution and unfunded pension debt continues to grow."

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