Fitch cited the size of New Jersey’s shortfall and its disclosure so late in the fiscal year ending June 30 when it cut the state on May 1 to A+, fifth-highest. It was the second Fitch reduction during Christie’s tenure. Standard & Poor’s has also lowered New Jersey twice in that period and Moody’s dropped it once, to Aa3, a step above S&P and Fitch.

“It’s time for the governor to take off the rose-colored glasses, stop bragging about fantasy balanced budgets and produce a realistic and responsible spending plan,” said Senator Paul Sarlo, a Democrat from Wood-Ridge who chairs the budget panel.

In the $3.7 trillion municipal-bond market, a falling credit grade has helped bolster New Jersey securities. With benchmark yields are at 11-month lows, investors are favoring lower-rated bonds in 2014. Borrowings from New Jersey have earned 5.4 percent this year, sixth-best of 27 states tracked by S&P Dow Jones Indices.

“If it were a tougher environment, there probably would be more of an impact from the ratings moving the way they’re moving and from the negative outlooks,” said Daniel Solender, director of munis at Jersey City, New Jersey-based Lord Abbett & Co., which manages $15.5 billion of state and local debt. “They’re being saved by rates being low.”

Rainy Day

New Jersey in fiscal 2013 had $465 million in its surplus fund, the fourth-lowest among U.S. states, according to Pew Charitable Trusts. The figure represented 1.5 percent of spending, according to a report last month from Pew, a Washington-based non-profit group that studies public policy.

The rainy-day projection for 2015 is even less. For the year beginning July 1, Christie projects a $313 million surplus, less than 1 percent of spending.

“Almost five years after the official start of the economic recovery, New Jersey continues to struggle with structural imbalance and stands in stark difference to many of its peers who registered sizeable budgetary surpluses in fiscal 2013,” John Sugden, an S&P analyst, wrote in an April 9 report.

The state’s 7.2 percent jobless rate in March exceeded the 6.7 percent U.S. average, and compared with 6.9 percent in neighboring New York and 6 percent in Pennsylvania.

Christie’s $34.4 billion budget plan for next fiscal year includes a record $2.5 billion pension payment. According to his figures, more than 90 percent of new spending goes to pensions, health benefits and debt payments.