NEW YORK (FOX 5 NY) - A new study claims that New Jersey is at the bottom of the list for being prepared for the next recession.
A Moody's Investors Service study released on Monday said that New Jersey, along with Illinois, has weak levels of preparedness for any future recession.
Based on its analysis of revenue volatility, coverage by reserves, financial flexibility and pension risk, the rating agency finds that 22 states are well prepared for the next recession, while 26 are moderately well prepared.
"Our analysis shows that most US states will be able to weather a moderate recession without significantly affecting their credit quality due largely to healthy reserves and strong financial flexibility," said Emily Raimes, a Moody's VP-Senior Credit Officer.
That preparedness doesn't extend to the Garden State. New Jersey has low reserve levels relative to the revenue declines it could see in a recession scenario, and relatively high pension risk, Raimes says.
Illinois is in a similar situation but is working to improve its pension funding and structural budget balance. New Jersey, it was noted, has recently added to its reserves.
Moody's analysis showed that Alabama, Iowa, Montana, North Carolina, North Dakota, Oregon, and Utah have the highest level of financial flexibility among states.