The Garden State includes rolling hills and a fabulous seashore, but its state government has done a fine job over the past 20 years of putting the state on the path to financial ruin. By promising unfund- ed payments and kicking responsibility down the road, the state legislators created what is unfolding today, a financial catastrophe... and New Jersey isn’t alone.
By the end of 2018, New Jersey had the worst indebtedness per person of any state in the nation. In- cluding bonds outstanding, promised state pensions, and retiree benefits, each New Jersey resident was on the hook for $65,100. This earned the Garden State an “F” grade from Truth in Accounting, a Chicago-based state finance think tank that assigns letter grades to states based on how much they owe per citizen. Just three states earned an A, while 7 received a B, 13 received a C, and 9 failed.
The next most poorly rated state was Illinois, where citizens owed $52,600 each. That’s pretty awful, but it’s still almost 20% less per person than New Jersey. All of this was long before the coronavirus and the economic shutdown.
Earlier this year, before COVID-19 was a common term, New Jersey pensions were about 40% funded, meaning they had just 40 cents for every dollar of benefit they had promised to retirees. And yet the state had planned to make just 70% of its required pension contribution this fiscal year, which would have put the state even further behind. Now, even that modest plan is out the window.
