Another last-in-the-nation ranking for New Jersey under Gov. Murphy. Last week, we reported that New Jersey’s tax climate for businesses was dead last, and this week it’s New Jersey’s long-term financial condition that’s ranked dead last, according to Truth In Accounting’s “Financial State of the States 2023.” New Jersey has been dead last in the nation for 8 of the last 9 years — in 2021, it was 49th. As a result, New Jersey has received an “F” for every year Gov. Murphy has been in office.
Like many states in this year’s ranking, New Jersey’s economic condition improved due to federal COVID relief and increased tax revenues from the COVID rebound, but New Jersey taxpayers were still on the hook for $53,600 of long-term debt per capita. Federal aid will end and tax revenues are already decreasing, but the debt will remain.
It’s important to note that while the Murphy touts New Jersey’s various upgrades from the bond rating agencies, these agencies focus on bonds, which comprise only about a quarter of New Jersey’s long-term liabilities. TIA focuses on the burden on taxpayers for ALL of New Jersey’s long-term liabilities.
Here are the grim details:
- New Jersey had $48.7 billion of assets as against $227.9 of liabilities, making for total debt of $179.2 billion. Divided among all New Jersey taxpayers, that comes to $53,600 per taxpayer.
- Unfunded pension liabilities make up $84 billion of the total, with New Jersey only having 42 cents set aside for every dollar owed to retirees. Almost all the gains from record investment returns for 2021 were wiped out by the negative returns in 2022, which underscores the need to reform state pensions — an impossibility for the NJEA-friendly Murphy.
Rather than undertake the hard work of reforming the pension system, Murphy used the temporary COVID revenue windfalls to ramp up government spending by over 40% and take good care of his government-union political supporters. He has decidedly not addressed New Jersey’s long-term financial condition and TIA’s rankings are continuing proof of this.
Nor has he fostered a hospitable environment for businesses. New Jersey will need a robust private economy to generate the jobs, income and tax revenues to meet these massive long-term liabilities, but under Murphy New Jersey has had the worst tax climate for every year he has been governor. When businesses are confronted with a lousy tax climate and massive unfunded liabilities, they will look elsewhere for a home.
Murphy will no doubt be long gone when the reckoning comes, but the data shows that he will have left New Jersey in a very poor position to deal with its future challenges. Murphy’s priority has been taking care of his government union pals, not his state, and it shows.