S&P upgrades New Jersey’s credit rating to A+, citing surplus growth and reduced liabilities

TRENTON, N.J. — S&P Global Ratings has upgraded New Jersey’s general obligation bond rating to A+ from A, praising the Murphy administration’s efforts to build its surplus and reduce long-term liabilities. It marks the state’s eighth credit rating upgrade since Gov. Phil Murphy took office.

“Against an ever evolving economic and policy backdrop clouded by uncertainty, we believe the state’s diligent work in rebuilding and preserving, to a degree, a stronger level of reserves while diligently addressing its large legacy liability challenges will help blunt budgetary pressure, as they arise,” S&P wrote in its analysis announcing the upgrade.

Murphy pointed to steps taken during his administration, including making five consecutive full pension payments, narrowing the structural deficit, and building a reliable surplus.

“Today’s news of a credit rating upgrade from S&P is a testament to the hard decisions we’ve made to address the high levels of indebtedness that we inherited upon taking office,” Murphy said. “Although there is much more work to do by the next governor, I’m proud that we’ve done right by taxpayers by tackling longstanding fiscal challenges that stacked up over decades.”

State Treasurer Elizabeth Maher Muoio said the upgrade is further evidence that the administration’s fiscal approach is working.

“This eighth upgrade in just over three years is further independent confirmation that our continued efforts to strengthen New Jersey’s financial health have been a success,” Muoio said. “Having changed the trajectory – from decades of credit rating downgrades to now eight upgrades under the Murphy Administration – is validation that our State is in far better financial shape thanks to these efforts.”

S&P previously raised New Jersey’s rating in March 2022 to A- from BBB+ and in April 2023 from A- to A. Other rating agencies, including Moody’s, Fitch, and KBRA, have also issued upgrades during Murphy’s tenure.

In its latest report, S&P credited the state’s “meaningful improvement in the state’s balance sheet” and “commitment to rein in its comparatively large debt and pension liabilities” while maintaining a healthy reserve balance.

Under the prior administration, New Jersey’s credit rating was downgraded 11 times.