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New Jersey's credit downgraded for 11th time under Christie

TRENTON, N.J. (AP) -- New Jersey's credit rating has been downgraded for an 11th time under Republican Gov. Chris Christie.

Moody's Investor Service on Monday dropped the state's credit rating on general obligation bonds one notch from A2 to A3. The agency cited the state's underfunded pension system and other budget issues, including the elimination of the estate tax.

The state has increased pension contributions since 2012, but Moody's says they're still below recommended levels and that unfunded pension obligations are growing.

"This rating action confirms what the Governor has been saying since 2009," Treasury spokesman Willem Rijksen said in a statement. "The pension system must be reformed or it will fail and continue to damage the entire state budget."

Christie and Democratic lawmakers last year cut the sales tax and eliminated the estate tax in a deal that led to an increase in the gas tax.

Christie's fiscal 2018 budget calls for a roughly $2.5 billion pension payment, up from about $1.9 billion in the current fiscal year.

Moody's says the cuts will reduce revenue by $1.1 billion by the 2021 fiscal year and strain New Jersey's ability to resolve its large structural imbalance.