Print Page   |   Sign In   |   Register
Search
Calendar
News & Press: Recent News

N.J. among worst of the worst when it comes to state fiscal health

Thursday, June 2, 2016   (0 Comments)
Share |

NJ.com 06/02/16

New Jersey beats only Massachusetts, Connecticut and a hurting Puerto Rico in a new state-by-state comparison of fiscal solvency by the Mercatus Center at George Mason University. Those shortcomings, and more, rank it 48th in the center's assessment of the 50 states and Puerto Rico. There's a bit of good news, though. New Jersey actuallymoved up one spot in the ranking since last year's report. There was some shuffling around at the bottom of the pile. Last year, the only U.S. state New Jersey outranked was Illinois. But the Prairie State pulled slightly ahead of New Jersey this year, while Connecticut and Massachusetts each tumbled below.

Compared on five measurements of fiscal condition, New Jersey crosses into the top half of states only once in a category that reflects the state's high personal wealth.

  • It comes in 20th place on a comparison of taxes, revenues and spending to personal income. "If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base?" the authors said.
  • Its worst standing is in "long-run solvency," where it ranks last among states. This measures whether the state has "enough assets available to cushion the state from potential shocks or long-term fiscal risks."
  • The state is near-last, 49th, in "budget solvency," which measures how well the budget stays in balance. New Jersey doesn't have a great track record here. Just last month, for instance, budget analysts announced a $1 billion shortfall for this year and next.
  • The debt load lands the state in 40th place. That's based on its bonded debt, pension liabilities and post-employment liabilities. The center determined its rankings based on 2014 fiscal data, when New Jersey had $54.7 billion in unfunded pension liabilities and $66.8 billion in other post-employment debt.
  • In cash on hand, the state comes in at 38th. According to the center, that's a statement on its ability to "cover short-term bills, which includes accounts payable, vouchers, warrants and short-term debt."

The report's authors, Eileen Norcross and Olivia Gonzalez, said the bottom five states have a few things in common: high debt and low cash on hand. The Mercatus Center receives funding from the Koch foundations, and billionaire Charles Koch sits on the board of directors"Each of the bottom five states exhibits serious signs of fiscal distress," the said. "Though the states' economies may be stronger than Puerto Rico's, allowing them to better navigate fis­cal crises, their liabilities still raise serious concerns."

 


Sign In


Latest News