Christie's New Jersey is Least-Solvent State: Study

Friday, 17 Jan 2014 01:13 PM

By Lisa Barron

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New Jersey ranks last among all states in long-term solvency, a new study shows.

It's more bad news for the Garden State, where Gov. Chris Christie is occupied with the ramifications of the bridge-gate scandal.

The study,  released this week by the Mercatus Center at George Mason University, reviewed the comprehensive annual financial reports (CAFRs) for fiscal year 2012 for all 50 states.

It found that New Jersey's per-capita budget deficit was $727 in 2012, the worst in the country, with states on average showing a per-capita surplus of $364.

The Garden State also has per-capita long-term liabilities of $7,935, nearly three times the national average. Its "net asset ratio" is -1.33, also the worst in the country.

The study's author, Sarah Arnett, writes that New Jersey 's problems result from "tax revenues [that] have not kept up with expenditures, use of budget practices that only appeared to balance annual budget, and significant debt levels."

Not all of New Jersey's financial woes can be attributed to Christie, Arnett points out.

Its long-term solvency problems are "due in part to nearly 15 years of underfunding its state and local pensions," Arnett said.

As a result, the state has an estimated unfunded pension liability of around $25.6 billion as well as $59.3 billion in unfunded liabilities for the health benefits of retired teachers, police, firefighters, and other government workers.

But Arnett concluded that the states at the bottom of the rankings "have serious shortcomings in their management of at least one dimension of fiscal condition."

Meanwhile, the five states with the highest-ranked overall fiscal condition are Alaska, South Dakota, North Dakota, Nebraska, and Wyoming, Arnett found.

All five have Republican governors.

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