New Jersey’s Senate president said credit-rating companies may be underestimating the severity of the state’s financial strains by giving it the second-lowest grade after Illinois.
“We are in worse shape than Illinois,” Senator Stephen Sweeney, a Democrat, said in an interview. “We are not investing in education, we are not investing in the areas that we want because all the money is going to pensions and health care.”
The comments underscore the persistent fiscal pressure on New Jersey, a high-tax state contending with massive debts to employee pension funds after years of failing to set aside enough to cover the $212 billion of benefits that have been promised.
New Jersey’s retirement system had about $82 billion of assets in 2018, only 38% of what it needs to cover checks that are owed in the decades ahead. That’s lower than any other state system in the U.S., according to data compiled by Bloomberg. The state’s obligation for retirees’ health care benefits adds another $90.5 billion.
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