New Jersey Still Long Way From Recovery
Employment and revenue lag, while pension gap, debt, and infrastructure needs are high.
By Mark Magyar, NJ Spotlight
The jump in New Jersey’s unemployment rate last month to 9.6 percent -- the farthest the state has been above the national average in 30 years -- is just the latest in a series of sobering statistics on the state’s economy and budget.
The 0.4 percent increase from May’s unemployment rate put New Jersey 1.4 percent higher than the national average of 8.2 percent, although the bad news was offset somewhat by a gain of 9,900 jobs during the month. But more troubling news came out of the State Budget Crisis Task Force report issued last week by a blue-ribbon panel of economists. It warned that New Jersey and other state governments faced looming fiscal crises in the years ahead that will require new revenues or draconian cuts.
No economic or fiscal report can be issued over the next year without raising questions about Gov. Chris Christie’s “New Jersey Comeback” and the ongoing debate between Christie and Democratic legislative leaders over whether the state can afford an immediate income tax cut. Christie’s Treasury spokesman, Andrew Pratt, immediately asserted that the state’s problems were “decades in the making” and contended that Christie’s policies had “pulled New Jersey back from the fiscal cliff.”
Indeed, of the six large states included in the State Budget Crisis Task Force Study -- New Jersey, New York, California, Illinois, Virginia, and Texas -- New Jersey arguably faces the toughest overall road:
Even with the new pension law, New Jersey’s combined unfunded pension liability and outstanding state debt equals $8,801 per person, second only to Illinois’ $9,770, and more than double the national average of $4,290.
New Jersey state revenue in Fiscal Year 2011 -- the last year for which revenue figures are available -- was 15 percent below its FY2008 pre-recession high, more than twice the national average of 7.0 percent, worse than the other five large states in the study, and sharply below New York State, whose revenue was down just 0.2 percent.
As of May, the total number of jobs in New Jersey was still 170,400 below the number of state residents working when the Great Recession hit in December 2007 -- better on a percentage-loss basis than California and Illinois, but in sharp contrast to New York State, which has not only regained all of the jobs lost, but added 33,100 new jobs in the same period.
Fifty-five percent of New Jersey’s highways were in poor or mediocre condition -- more than twice as high as in neighboring New York, 3.5 times the national average of 16 percent, and worst among the six states studied.
Thirty five percent of New Jersey’s bridges were structurally deficient or functionally obsolete, ranking second to New York State’s 37 percent and 2.5 times the national average of 14 percent.
Keevey warned that New Jersey revenue growth in the years ahead would not be sufficient to simultaneously fund the rise in pension contributions required by the new pension law; the cost of needed repairs to highways, bridges, and other infrastructure; the increasing cost of Medicaid nursing home care for an aging population; school aid, debt service, and other growing costs.