Jersey’s Junk Finances

And then there were nine — New Jersey debtrating downgrades, that is, since Gov. Chris Christie took office. And all for the same reason: the Garden State’s seemingly hopeless, endless publicpension crisis.

Moody’s Investors Service lowered its rating a notch on $ 32.2 billion worth of state bonds, following last September’s similar downgrade by Standard & Poor’s.

The agency cited Trenton’s “weak financial position and structural imbalance, primarily related to continued pension contribution shortfalls.”

Jersey’s publicpension system is bankrupt, the state can’t afford its scheduled payments, and paying off the accumulated debt will take decades— if it’s even possible.

No surprise: It took decades of unaffordable promises by state leaders to create the crisis.

Meanwhile, that debt takes a mounting toll on Jersey’s ability to fund basic operations — as the Legislature resists Christie’s efforts to impose serious longterm reforms.

The reforms enacted in 2011 were a good first step. But they didn’t come close to fixing the problem. And hiking taxes to make up the difference — the traditional Democratic response— is just as destructive.

A new Manhattan Institute report on California’s pension crisis underscores the problem New Jersey— and, quite possibly, New York — face. In the Golden State, publicpension costs are rising at four times local revenue. So Californians are seeing sharp cuts in core government services at the state and local levels— even in more affluent locales. And these “crow douts” grow more drastic when the economy turns south.

New Jersey hasn’t fallen over the fiscal precipice yet — but the red flags keep on coming.