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Center Square NJ: New Jersey gets a failing grade, ranks last in financial study of states’ fiscal health
By Dave Fidlin
(The Center Square) – New Jersey’s pre-pandemic balance sheet was described as being in “dire fiscal health” in a recently released independent analysis of states’ finances.
In its annual report, Financial State of the States 2020, officials with the organization Truth in Accounting ranked New Jersey No. 50 of all states for its fiscal condition heading into this year’s unprecedented COVID-19 crisis. The dead-last showing earned it a grade of “F” from the nonprofit, which focuses on government spending practices.
The Garden State faces similar challenges to many of its neighbors – unfunded retiree and health care contributions for government employees – but to a greater magnitude.
According to this year’s report, Truth in Accounting analysts have pegged New Jersey’s debt burden at $189.6 billion, which equates to $57,900 per state taxpayer.
“New Jersey’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years,” analysts wrote in the report. “Of the $225.6 billion in retirement benefits promised, the state did not fund $95.7 billion in pension and $76.8 billion in retiree health care benefits.”
Based on its tentative internal number crunching, Truth in Accounting analysts anticipate New Jersey losing $14 billion in revenue from lockdowns and other factors that have crimped the state’s economy since the crisis began.
Speaking in broad terms, Sheila Weinberg, founder of CEO of Truth in Accounting, said the fiscal challenges New Jersey and scores of other states are facing should serve as a wake-up call to prepare for more unforeseen circumstances.
With the possibility of more federal-level financial assistance on the horizon, Weinberg said Truth in Accounting is advocating for a common sense, fact-based approach in determining how much money should be funneled to each state.
“We’re not saying you should do a bailout, but if you do a bailout, don’t just pick a random number or do what I call a sloppy, uneducated guess,” Weinberg said in an interview with The Center Square.
Read the full report here.