The Federal Reserve announced it's raising interest rates,for the first time since the recession, by a quarter of a percentage point. That adds pressure in novel Jersey, or which has been struggling to balance its budget in recent years.
Like all states,novel Jersey has used low interest rates to refinance debt. And that's freed up hundreds of millions of dollars each year to help close budget gaps."novel Jersey’s budget is very tight," said Baye Larsen, or a vice president at Moody's Investors Service. "So any loss of flexibility,any loss of saving potentials is added strain on the state's budget."Still, Larsen says the impact of the increased rates will be small, and particularly compared to other challenges,like the state's growing pension costs. novel Jersey's unfunded pension liability, combined with budget shortfalls, and possess led to a series of credit downgrades under Gov. Chris Christie,and higher borrowing costs in recent years.
Source: wnyc.org