A major credit rating agency has lowered the outlook for New Jersey to negative from stable, in part because tax collections are behind expectations due to a sluggish economic recovery.
Moody's Investor Service announced the change Tuesday.
But Moody's did not alter the state's debt rating, which remains Aa3 — its fourth-highest investment-grade rating.
The firm says the state has a relatively high amount of debt, lacks a specific plan to build up fund balances and is facing difficulty because of increasing pension obligations.
New Jersey Treasury spokesman Bill Quinn says Moody's "does not give adequate weight to critical, positive factors" such as improving employment and stronger tax revenues for November.
Moody's says it could revise the outlook back to stable if there is sustained tax revenue improvement.