New Jersey is nearly $209 billion in debt and has the worst finances of any state in the nation, according to a report released Tuesday.
Truth in Accounting, a think tank that analyzes government finances, ranked all 50 states based on their debt per taxpayer. The group’s latest report said New Jersey taxpayers carry $67,200 each in debt, a burden has almost doubled since 2013, when it was $36,000 per taxpayer.
New Jersey’s massive debt load largely stems from pension and retiree health care costs for state workers. The report said the state has $118.8 billion in unfunded pension benefits and $70 billion in unfunded retiree health care costs. The think tank accused New Jersey of using “accounting gimmicks” when calculating its finances, and said the state’s books are off by $57.6 billion when it comes to public debt.
“New Jersey is in a financial tailspin that could end in disaster for taxpayers or state employees counting on their retirement benefits,” said Sheila Weinberg, founder and CEO of Truth in Accounting. “The problem affects everyone in New Jersey, but there’s a surprising lack of public awareness of the issue. It’s time for state residents to hold their elected officials accountable on this issue and demand immediate solutions.”
The three major Wall Street credit-rating agencies — Fitch Ratings, Moody’s and S&P Global Ratings — have cut New Jersey’s bond rating 11 times combined under Gov. Chris Christie in large part because of the ailing pension system. After years of neglect from previous governors and lawmakers, Christie tried to save the pensions from collapse with broad reforms in 2011, only to yank billions of dollars in contributions he had pledged three years later, in 2014, amid a budget crunch.
Weinberg said the state is “beyond the point of no return” and must reckon with its debt burden by instituting tax hikes or benefit cuts.
New Jersey was one of nine states to receive an “F” grade from the think tank and was dubbed a “sinkhole state” due to its debt burden. Alaska’s finances are in the best shape, with a taxpayer surplus of $38,200, according to the report.
