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New Jersey Ranks Worse in Fiscal Health then Bankrupt Illinois

Sweeney & Prieto

July 26,2017

the staff of the Ridgewood blog

Ridgewood NJ, The fiscal health of America’s states affects all its citizens. Indicators of fiscal health come in a variety of forms—from a state’s ability to attract businesses and how much it taxes to what services it provides and how well it keeps its promises to public-sector employees.

The Mercatus Center at George Mason University’s “Ranking the States by Fiscal Condition,”is  now in its fourth year, Eileen Norcross and Olivia Gonzalez calculate indicators of fiscal health for all 50 states. Based on states’ 2015 financial statements, Florida ranks first as the most fiscally healthy state, while New Jersey ranks the lowest.

The study ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pensions and healthcare benefits. With refinements in its methodology, the 2017 edition updates the version that the Mercatus Center published in 2016. It presents information from each state’s audited financial report in an easily accessible format and is the most comprehensive snapshot of state financial health to date.

As usual New Jersey ranked 50th or dead last ,even behind bankrupt Illinois which ranked 49th.  Even Connecticut with its aggressive taxation policies that drove out huge employers General Electric and Aetna  still ranked 37th.

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Persistent underfunding of public-employee pension system looks to have been a key factor in dismal showings in state-by-state comparisons

New Jersey’s chronic budget problems have brought on a series of credit-rating downgrades in recent years, and now the state has landed in dead last place in two recent reviews of the fiscal health of all 50 states.

The latest “Fiscal Condition” rankings released by George Mason University’s Mercatus Center just dropped New Jersey several spots to 50th, thanks in large part to both short-term and long-run solvency issues that are detailed in the university’s review.

New Jersey also came in last place in a new Pew Charitable Trusts long-term analysis of how well state revenues matched expenses between fiscal years 2002 and 2015.

In both cases, the state’s persistent underfunding of the public-employee pension system appears to have contributed significantly to the dismal showings in the state-by-state comparisons. But the reports also highlight some of New Jersey’s other longstanding budget problems, including significant debt and the lack of a substantial surplus account to hedge against revenue shortfalls.