Duncan Currie - The Swamps Of Jersey:
Corzine’s decision to raise taxes in an election year indicates the rickety condition of New Jersey’s fiscal house. “Public spending in New Jersey doubled in real terms, as a percentage of GDP, between 1971 and 2008,” write Mercatus Center scholars Eileen Norcross and Frederic Sautet. Government spending represented over 7 percent of GDP in 2008, compared with 5.4 percent in 1997. Corzine has touted the spending cuts in his fiscal year 2010 budget, which took effect on July 1, but New Jersey’s nonpartisan Office of Legislative Services projects a structural budget deficit of around $8 billion for fiscal year 2011. As of June 2008, the state had an outstanding debt of roughly $31.8 billion (one of the highest burdens in the country). It also faces the daunting long-term challenge of shoring up public liabilities: As Norcross and Sautet point out, “New Jersey’s pension fund faces a potential $56 billion unfunded liability (up from $18 billion in 2006), which rises to $130 billion when post-retirement medical and prescription drug benefits and stock market losses are factored in.” In early August, Moody’s Investors Service bumped New Jersey’s credit outlook down to “negative.”
The frightening details can be found here.
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