New Jersey's weakened credit standing is likely to dampen the fiscal outlook of many of its municipalities, particularly those urban communities that rely on state aid to fund large portions of their budgets, according to a report by Moody's Investors Service.

The report, released yesterday by the New York-based credit agency, drew no conclusions about the state's commitment to its municipalities. Instead, several Moody's analysts described the report as a clarion call to investors about future credit problems that these cities, towns, and villages might experience.

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