New Jersey has received a credit rating upgrade from Kroll Bond Rating Agency, with the state’s general obligation bonds moving from A+ to AA- — the highest rating KBRA has assigned to New Jersey since it began rating the state in 2015.
The upgrade is also notable because it is the first time in New Jersey history that a governor has secured a credit rating increase during the first year of an administration, according to the state Treasury Department.
KBRA pointed to several factors behind the decision, including New Jersey’s continued full pension contributions, progress in reducing long-term liabilities, improved budget management and the state’s ability to maintain substantial financial reserves. The agency said the FY 2027 budget continues that fiscal discipline, including a sixth consecutive full actuarially determined pension contribution.
Gov. Mikie Sherrill said the upgrade reflects efforts by her administration to strengthen the state’s finances. The administration says the latest budget reduced the structural deficit by more than half while maintaining a roughly $6 billion surplus, making a full pension payment and continuing funding for property tax relief and schools.
A higher credit rating can have a practical impact beyond the numbers. Stronger ratings can allow the state to borrow at lower interest rates, potentially reducing financing costs for taxpayers when New Jersey issues debt for major projects.
The AA- rating now places KBRA’s assessment of New Jersey one level above the state’s A+ ratings from S&P and Fitch and broadly in line with Moody’s Aa3 rating.
Sources: New Jersey Department of the Treasury; Office of Gov. Mikie Sherrill; Kroll Bond Rating Agency (KBRA)
By NJ RADAR Team