the staff of the Ridgewood blog
Trenton NJ, according to the PEW policy institute ,even in the aftermath of two recessions, most states amassed sufficient revenue between fiscal years 2003 and 2017 to cover their expenses. But total revenue in 10 states fell short, jeopardizing their long-term fiscal flexibility and pushing off to future taxpayers some past costs for operating government and providing services.
New Jersey has accumulated the largest gap between its revenue and annual bills. Between fiscal 2003 and 2017, it took in enough to cover just 91.3 percent of its expenses—the smallest percentage of any state. While the typical state’s revenue, composed primarily of taxes and federal grants, totaled 102.1 percent of its annual bills over the past 15 years—a time frame that spans two economic recoveries and the Great Recession.
New Jersey’s deficit, with aggregate revenue able to cover only 91.3 percent of aggregate expenses, followed by Illinois (93.8 percent). They were the only two states with aggregate shortfalls exceeding 5 percent of total expenses, and the only ones with annual deficits in each of the 15 years.
PEW concludes that Like families, states can withstand periodic deficits without endangering their fiscal health over the long run. In fact, all but one state (Montana) had one or more years in the red. But chronic shortfalls—as with New Jersey and Illinois each year since at least fiscal 2002—are one indication of a more serious structural deficit in which revenue will continue to fall short of spending absent policy changes. Without offsetting surpluses, long-running imbalances can create an unsustainable fiscal situation.