NJ has highest debt per taxpayer in the nation, report finds
Before COVID-19 took hold of New Jersey, the state was already $189.6 billion behind on its bills, at a rate of $57,900 of state debt per taxpayer, according to a report released Tuesday by a financial watchdog nonprofit.
Once again, in the annual Financial State of the States report from Truth in Accounting, New Jersey ranks the worst of any state for taxpayer burden — a burden that's expected to worsen as the financial impacts of the coronavirus pandemic play out.
"We found that the poor accounting practices the state and other states use to balance their budgets allow them to go into debt and balance their budgets at the same time," Sheila Weinberg, founder and CEO of Truth in Accounting, told New Jersey 101.5. "A balanced budget would technically make it so you don't go into debt."
In the report, New Jersey was one of eight states to receive a grade of "F" for their financial conditions, based on the states' annual financial reports and retirement plans reports.
In select states, such as Alaska, Idaho and Wyoming, governments have managed a surplus per taxpayer, the report finds.
While the Garden State remains in last place, the per-taxpayer burden did drop from the $65,100 figure presented in Truth in Accounting's report last year. Weinberg said the relief is linked to changes related to the state's retiree healthcare benefits. Much of New Jersey's financial problems stem mostly from unfunded retirement obligations that have accumulated over the years, the report notes.
According to the rough estimates in the report, New Jersey is projected to lose $14 billion as a result of the COVID-19 health crisis.
"The uncertainty surrounding this crisis makes it impossible to determine how much will be needed to maintain government services and benefits, but these states' overall debt will most likely increase," the report states.
A nine-month budget proposal unveiled by Gov. Phil Murphy in August includes $4 billion in borrowing to help make up for shrinking tax revenues caused by the health emergency. Murphy has until Sept. 30 to sign a budget into law.