TRENTON, N.J., July 28 (UPI) -- Wall Street credit agencies have cut New Jersey's credit rating, a move that could cost the state millions when it tries to borrow money.
Fitch Ratings and Standard and Poor's both dropped New Jersey's rating to AA-after the state Supreme Court handed down a ruling saying the state's $28 billion budget was unconstitutional, the Philadelphia Inquirer reported Wednesday.
The New Jersey Supreme Court this week said a plan for New Jersey to borrow $1.9 billion violated the state constitution, which mandates a balanced budget. However, the court allowed the budget to remain in effect to avoid disrupting government work, the Inquirer said. Future budgets must be in balance, the court said.
James Hughes of Rutgers University told the Inquirer: "I think they would had to have been extraordinarily naïve to think if they borrowed on that scale that the rating agencies wouldn't scrutinize it very carefully. Those agencies aren't in the business of letting things pass them by if it's not wise fiscal practice."
