Unfunded pension liability continues to plague the Garden State.
New Jersey Is a ‘Top 5’ Financial Disaster
New
Jersey has been racking up a variety of dubious honors lately.
The
Rockefeller Institute of Government named the Garden State one of the nation’s
five most financially
challenged states, according to research done for a pending report on state
and local government financing. Then new “Fiscal 50” data released by Pew
Charitable Trusts showed that New Jersey ranks the third worst in total
debt nationwide. Meanwhile, recent forecasts from the Office of
Legislative Services indicate that the state could be facing a $1.1 billion budget
deficit for 2016 and 2017.
Using
the Fiscal 50 data, based on complete 2013 numbers, Pew Charitable Trust also broke
down how New Jersey’s crippling debt and unfunded liability problem impacts
taxpayer income.
- New
Jersey’s total debt of $35 billion accounts for 7.2 percent of residents’
personal income, while the average for residents of all 50 states (based
on total state debt) was 3.7 percent. - New
Jersey’s unfunded pension costs of $51 billion represent 10.4 percent of
personal income for state residents. Nationwide, the rate was 6.9 percent.
The
bleak picture is not good news for small business owners, who are already weary
of the state’s poor economic climate and the constant assault of anti-business
measures coming from the Legislature.
In
the meantime, New Jersey awaits the verdict from the state Supreme Court, which
will decide whether the state must reverse its freeze on retired public
employees’ cost-of-living adjustments. If the Court sides with retirees, the
state could be on the hook for tens of billions that were expected to be saved.
