State of New Jersey

Moody's said the upgrade reflects continuing strong revenue and liquidity trends, completion of a debt-reduction program and increased pension contributions.

Bonds defeased include state GOs and securities from the New Jersey Building Authority and the Economic Development Authority.

The agency cited “the appropriation of the full actuarial pension contribution in fiscal 2022 for the first time in 26 years" coupled with improved reserves.

A $3.7 billion transfer from the general fund would cover $2.5 billion for retiring and defeasing state debt, and $1.2 billion to backstop capital construction projects.

Regina Egea, president of the Garden State Initiative, analyzes New Jersey's fiscal landscape, including the proposed state budget, unfunded pension liability and deficit borrowing. Paul Burton hosts. (20 minutes)

Dynamics at play in New Jersey include the pandemic, an election year, massive borrowing, significant federal aid and a major pension liability problem.

In their state of the state addresses, the two governors discussed bringing in more revenues.

The new corporate tax incentive legislation includes an annual cap for a key component, in an effort not to repeat the mistakes of its predecessor program.

Garden State revenues increased in November based on recently enacted tax increases, but analysts say a sustained fiscal rebound hinges on progress confronting the COVID-19 pandemic.

A supply/demand imbalance allowed New Jersey and Massachusetts to reprice to lower yields while the beleaguered New York MTA will head back to the Fed for liquidity.