Gov. Chris Christie

TRENTON, NJ-Moody’s Investors Service said in a note to investors Tuesday that they have changed their view of New Jersey’s debt to “negative,” saying the state economic recovery is still sluggish while costs are rising.

The agency did not downgrade the debt, but said if revenue growth continues to be slower than projected or there is a significant increase in the state’s debt, it could move to do so, according to a report in the Star-Ledger.

Moody’s downgraded the state’s bond rating to Aa3 in 2011.

In their Tuesday note, Moody’s analysts note that public workers’ pension costs and other mandated costs are rising fast, and revenue is not rising fast enough to meet them.

Gov. Christopher Christie’s “proactive approach” with efforts at curtailing pension and health benefit liabilities is commendable, Moody’s said – but not enough.

Also, the analysts noted that revenue collections are running below projections.  Revenue is $98 million behind projections for the fiscal year so far; however, a report from the state Treasury Department issued Tuesday says that November’s collections exceeded projections by $17 million for the month.

The Treasury Department issued a statement late Tuesday condemning Moody’s note to investors as “flawed.”

Moody’s was relatively upbeat about job growth in the state, saying that it was running at about the same pace as in the nation, a sign of improved economic stability.

The state has gained jobs in the last eleven consecutive months.