NJ Has Worst Financial Health In Nation, With $58.7K Burden Per Taxpayer: Report

NEW JERSEY — No state has worse fiscal health than New Jersey, according to a recent report. And exiting that financial hole would require $58,700 from each taxpayer, according to Truth in Accounting.

The data comes from the deficit-watching think tank's "Financial State of the States 2022" report, released Oct. 24. Thirty-one states didn't have enough money to pay their bills in Fiscal Year 2021 — the report's timeframe of analysis.

Truth in Accounting has placed New Jersey in its bottom five for 13 straight years. The money required to pay the state's bills increased by $12.5 billion in FY 2021, reaching a total burden of $241.1 billion, according to the report. The nonprofit says that New Jersey only had $43.3 billion available to pay those bills.

New Jersey faces several issues, according to the report. Like all states, New Jersey's pension-plan assets saw significant, short-term increases. But the Garden State's net pension liability increased, as New Jersey assumed new pension responsibilities from their local governments, the report states.

The stock market experienced record gains in 2021, but markets lost an average of 14 percent in value in 2022, Truth in Accounting says. If benefits and funding don't change, that would leave taxpayers with underfunded retirement promises, the report states.

"New Jersey had only set aside 47 cents for every dollar of promised pension benefits and one cent for every dollar of promised retiree health care benefits," the analysis says. "Given these facts, the state’s overall debt situation will likely further deteriorate over the coming year."

The taxpayer burden to offset these expenses totals $58,700 per person. That's double the individual burden in all states except Connecticut ($56,500), Illinois ($49,500) and Hawaii ($49,300).

While federal COVID funding is set to decline, New Jersey also ranks last in the nation in terms of federal-government dependency, according to MoneyGeek. For every dollar New Jerseyans spend on federal taxes, the state only receives a return of 56 cents in federal funding. New Mexico has the highest rate of return on federal spending — $3.69 for each dollar spent.

Read Truth in Accounting's full report here.