Standard & Poor's Corp. yesterday placed $3.2 billion of New Jersey general obligation debt on CreditWatch with negative implications, warning that uncertainty over the fiscal 1992 budget is threatening one of the nation's last triple-A state credits.

The action partially reflects concern that, as New Jersey wraps up its budget later this month, the integrity of revenue estimates might be compromised to bring about an artificially balanced budget, explained Nancy Feldman, a vice president at Standard & Poor's.

New Jersey is facing a $1.5 billion shortfall for fiscal 1992, and Ms. Feldman said the rating agency will be watching closely to make sure the budget balancing act is handled responsibly.

"We're concerned at the end of the budget process about revenues getting inflated just to get the budget in balance," she said. "I don't think we see that happening. But there are opportunities to adjust revenue estimates, and we want to be able to feel comfortable" with whatever changes are made.

As an example of items that have been adjusted recently, Ms. Feldman pointed to the state sales tax. She said sales tax revenues for 1991 were projected to grow 29% on the strength of a large tax increase instituted last year, and the state forecast a 2% increase over that level for the 1992 fiscal year. But recently, when sales tax collections were found to have grown just 25% in 1991, the 1992 level was left unadjusted, meaning collections would have to increase 4% to meet the same projected level of growth.

Ms. Feldman said Standard & Poor's does not have a problem with that assumption in particular, but she said it does illustrate ways in which revenue projections are open to change as the budget process winds down.

Lawrence Singer, director of public finance for the state, said Ms. Feldman's concerns were "cautionary, and that's how we're treating them."

He added that state officials are disappointed with the Standard & Poor's CreditWatch decision. "But on the other hand, we feel that the state of New Jersey is an economically very significant and powerful state with excellent business resources and infrastructure resources.

"Despite the effects of the recession, Standard & Poor's continued the triple-A," Mr. Singer pointed out.

He said Gov. Jim Florio is very sensitive to the warning carried with the CreditWatch designation and is "doing everything that he can to deal with the remaining concerns of Standard & Poor's."

Among those concerns is the state's decision to use all but $1 million of its $180 million fiscal 1991 surplus -- the second year in a row New Jersey has ended the fiscal year with virtually no fund balance.

And the state's original plan to rebuild the surplus to $274 million in next year's spending plan has already been trimmed to $210 million in the most recent budget package and could be sliced further by the time a final plan is approved.

Other budgetary uncertainties are blemishing New Jersey's triple-A rating as well.

The state is counting on $400 million in revenues from the sale of a state road to the New Jersey Turnpike Authority to help close the 1992 gap, but the Legislature has yet to approve the idea.

And Gov. Florio is pegging his hopes for another $370 million of savings on state employee wage deferrals and forced furloughs. But union opposition to the idea is reportedly growing, threatening to scuttle the plan and force the administration to resort to widespread layoffs.

One potential bright spot for the state is a possible $350 million boon from increased federal Medicaid reimbursements. A 1990 law permits states to request federal matching funds on indigent hospital care, and about 16 states including New Jersey are seeking the money.

New Jersey has not yet applied for the reimbursement, but has also not included the projected revenues in its 1992 budget -- a conservative approach that Ms. Feldman called a "positive" factor in the rating assessment.

If the money did materialize next year, it would provide the kind of budget flexibility a larger fund balance would have offered.

Another proposal to cut the 1992 deficit is an acceleration of utility gross receipts tax collections. That will increase next year's tax revenues by $560 million, and a smaller proportion in subsequent years until the benefits of faster collections are exhausted, Ms. Feldman explained. But then the state will have to find a way to replace the revenues in future budgets.

"It does have some elements of 'one-shot' in it," Ms. Feldman said, but the plan is being implemented "prudently."

Market sources said the move to place New Jersey on CreditWatch was widely anticipated, and had little price impact. Twenty-year GOs were quoted at about a 6.90% yesterday, and long bonds were at 7%.

Standard & Poor's currently rates eight states AAA, having cut Maine to AA-plus from AAA last week. Moody's Investors Service rates 11 states Aaa, giving Georgia, Illinois, and Tennessee a gilt-edged rating they do not enjoy from Standard & Poor's.

Also affected by yesterday's action were $2.5 billion in various New Jersey agency debt, including $1.3 billion of Housing and Mortgage Finance Agency bonds carrying the moral obligation of the state.

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