Wall Street rating agency S&P Global has upgraded New Jersey’s credit rating for the third time under the tenure of outgoing Democratic Gov. Phil Murphy.
The move to raise the rating one notch to A+ from A on Aug. 11 cites efforts by the Murphy administration to rein in the state’s large debt levels and public worker pension costs while trying to maintain a cash reserve…
Does the credit upgrade matter?
The rating upgrade announcement is “very reputational,” said Marc Pfeiffer, a senior policy fellow at Rutgers University’s Bloustein School of Planning and Public Policy, who studies local government in New Jersey.
But beyond news headlines, credit ratings are highly technical in nature and don’t “affect taxes on a day-to-day or year-to-year basis,” Pfeiffer said.
The ratings determine how easy — as in, how costly — it is for the government to borrow money to fund large-scale projects like schools and transportation infrastructure.
“When companies look to relocate, they consider the fiscal condition of the state and its ability to provide services and infrastructure,” Pfeiffer said. “Bond rating is a rough representation of that ability compared to other places.”