Standard & Poor's has concerns about the $32.9 billion budget for fiscal 2014 that New Jersey Gov. Chris Christie proposed in late February.
The budget's revenue expectations could be challenging to meet and the financial impact from Hurricane Sandy remains unclear, credit analyst John Sugden wrote. The impact of the federal fiscal consolidation on New Jersey is also a concern.
Christie's budget relies on new and untested revenues. Finally, the macroeconomic environment remains uncertain, Sugden wrote.
"These are significant issues for New Jersey given the state's limited financial flexibility and high fixed costs related to debt and postretirement liabilities," Sugden wrote.
"In our view, future budgets could be pressured, absent sustainable economic growth, as fixed costs continue to climb and the revenue impacts of one-time economic events fade."
