The Bond Buyer

Deep budget challenges greet New Jersey's new governor

The Chris Christie era in New Jersey ended late Tuesday morning with the swearing-in of Gov. Phil Murphy, who will be tested right out of the gate with a host of fiscal obstacles.

Murphy, a former executive at Goldman Sachs and ambassador to Germany, inherits a state that was downgraded 11 times during Christie's eight years, driven largely by a rising unfunded pension burden. Murphy, a Democrat, campaigned on a proposal to structurally balance the state budget with a millionaire’s tax, but new federal tax legislation that caps deductions on state and local taxes creates a potential hurdle to this revenue strategy.

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