More bad news for New Jersey Governor Chris Christie. As he tries to survive an explosive corruption scandal and stave off a federal audit on use of Hurricane Sandy funds, a new study ranks New Jersey the least economically solvent state in the nation.
George Mason University’s Mercatus Center released a working paper Thursday ranking the solvency of the 50 states by a number of factors–from “liquidity and budgetary balance” to “reliance on debt to finance current and long-term expenditures and ability to pay for essential services.” They further subdivided the category of solvency generally into cash solvency, budget solvency, long-run solvency, and service-level solvency.
The study finds that New Jersey is in the worst financial state of any state in the union generally, while also being the worst in budget and long-run solvency. New Jersey’s highest ranking on any list, #39, is for service-level solvency, though the statistics used for this study predate the spike in service needs after Hurricane Sandy. It also has the worst per-capita budget deficit in the nation.
The researchers explain that the state faces a number of management problems with the way multiple administrations have handled its economy. Researchers cite “nearly 15 years of underfunding its state and local pensions,” as well as tax revenues that do not match or keep up with state expenses, “use of budget practices that only appeared to balance their annual budgets,” and “decades of using bonds without being able to pay for them.”
The people of New Jersey have been extraordinarily supportive of Christie despite this record. Christie won reelection with almost record levels of support, particularly among minority communities, where he won 30% of the black vote and 51% of the Latino vote. Even after the recent George Washington Bridge scandal, New Jersey voters do not see Christie as a “bully” and are giving him the benefit of the doubt on being involved in the operation.
After addressing the transportation scandal currently engulfing his administration, Christie told the audience of legislatures at his State of the State address this week that the state “is good and getting better.” Christie has repeatedly highlighted the fact that New Jersey is the largest donor state of taxes in the country– paying far more than it receives in federal tax funding–but has done little to change this pattern. On the contrary, the tax burden on the average New Jersey family has increased 18.6% under Christie. That is not to say that Christie is exclusively responsible for the dire economic situation in the state–Governor Jon Corzine shut down the government because the legislature refused to pay taxes— but nothing seems to have improved since Christie’s time in office, despite Christie running a campaign based in large part on economic recovery. Under his tenure, 25% of New Jersey’s youth are moving back in with their parents and rampant crime is overtaking urban centers like Newark and Camden.
Read the full working paper for George Mason’s Mercatus Center here.