Truth in Accounting came out with its “Financial State of the States 2020,” an annual report on how much debt-per-taxpayer each state owes. New Jersey once again ranked DEAD LAST in the nation for the SEVENTH STRAIGHT YEAR. Each NJ taxpayer owes a jaw-dropping $57,900 – which is $5,900 more than broke Illinois, the state with the worst bond rating.
More than three-quarters of this debt comes from unfunded liabilities for public-sector retirees. Because politicians did not fund these obligations in the past, present NJ taxpayers are on the hook for $44,271. As detailed in Sunlight Policy’s recent report, “Ugly Truths and Hard Facts About New Jersey’s Pension Crisis,” there’s a very good reason why NJ politicians did not fund these obligations: the overwhelming political power of NJ’s most powerful special interest, the NJEA. The facts show that the NJEA led the way in undermining the soundness of the state’s largest pension fund, the Teachers’ Pension and Annuity Fund (TPAF), which is one of the very worst public pensions in the nation. Now the NJEA wants to escape the blame, but the facts say otherwise.
Unfortunately, the NJEA continues to hold sway over Gov. Murphy. In its current FY2021 budget, the state will borrow $4.5 billion in bonds to make the $4.7 billion pension payment, $4 billion of which will go to make up for past underfunding. And this still is not the full required payment, so the unfunded liabilities will increase. As urged by the NJEA, Murphy is willing to throw good taxpayer money after bad: TPAF remains unreformed and is only 27% funded and projected to become insolvent in 2027). The NJEA was certainly pleased: “Thank you for the $4.7 billion payment …” (from NJSpotlight).
NJ is already the most indebted state in the nation, and Murphy wants to borrow $4.5 billion more. This is burdening future generations with costs that were generated in the past – in other words, kicking the can down the road.
Once again, NJ government is being run by and for special interests like the NJEA, not for the people of the state.