The rating upgrade for the State of New Jersey’s (the State’s) General Obligation Bonds (G.O.) recognizes its increasingly well-established track record of full actuarial pension funding, substantial progress in reducing long-term liabilities, and adherence to improved budget management. These practices have supported the measured use of reserves accumulated in the years following the pandemic and the maintenance of considerable financial flexibility. The FY 2027 Budget continues this discipline, providing for a full actuarially determined pension contribution (ADC) for a sixth consecutive year and a projected year-end undesignated fund balance equivalent to 10.0% of appropriations. The upgrade reflects KBRA’s expectation that continued adherence to these practices will provide the State sufficient flexibility to gradually close its remaining, measured structural budget gap, maintain prudent reserves, and sustain progress in addressing long-term liabilities moving…
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