Truth in Accounting published its annual “Financial State of the States 2021,” and the good news is that New Jersey broke its streak of six consecutive years as the most indebted state. The very bad news is that despite the gusher of federal COVID-relief money New Jersey ranked 49th, with an average debt burden of $58,300 per taxpayer. That staggering amount was only exceeded by Connecticut’s $62,500 of debt per taxpayer.
Here are the grim numbers:
- Assets available to pay liabilities: $31.7 billion
- Unfunded pension liabilities: $100.3 billion
- Unfunded healthcare liabilities: $69.4 billion
- Total liabilities: $216.9 billion
- Total debt: -$185.2 billion
In other words, New Jersey owes $185 billion in debt, which comes to $58,300 per taxpayer.
This is why Sunlight has been critical of Gov. Murphy borrowing $4 billion to help make the record $6.9 billion pension payment. Most of the $6.9 billion will go to paying down unfunded liabilities (which is debt) but it does little good for New Jersey’s long-term financial condition to add on $4 billion of debt to the existing $185 billion.
And putting $6.9 billion (15% of the state budget) into a broken and unreformed pension system is fiscally unsustainable and barely moves the needle on the funded status of the pension funds. And it doesn’t move the needle at all in relation to the $185 billion of overall debt and the $58,300 burden for each taxpayer.
Seen in this light, Murphy’s actions look like a sop to his public union pals in an election year. Meanwhile, faced with this sort of debt burden, taxpayers will continue to flee New Jersey.