NJ Ranked 49th Out of 50 States for Financial Condition: A “F” for Every Year Under Gov. Murphy

Another dismal ranking for New Jersey’s financial condition under Gov. Murphy.  New Jersey’s long-term financial condition ranked 49th out of the 50 states, according to Truth In Accounting’s “Financial State of the States 2024.”  That’s an improvement from 50th last year, but New Jersey has still been dead last in the nation for 8 of the last 10 years.  During every year Murphy has been in office, New Jersey has been in the bottom two states and received a grade of “F.”  

But New Jersey’s improvement is less than meets the eye. According to Truth in Accounting, New Jersey was no longer in the worst position “mostly because of changes made in the methods used to estimate its pension and retiree healthcare debt” — such as using a higher discount rate for the liabilities.  In other words, there has not been the kind of durable, structural reform that would permanently alter New Jersey’s long-term financial trajectory.

Here are the bottom five states and their debt-per-taxpayer:

50. Connecticut – $44,300

49. New Jersey – $42,500

48. Illinois – $37,000

47. Massachusetts – $25,400

46. California – $17,400

Note that all of these states have political systems dominated by powerful, taxpayer-funded government unions that make them particularly resistant to reform — just like New Jersey.  

And while the Murphy touts New Jersey’s various upgrades from the bond rating agencies, these agencies focus on bonds, which comprise only about a quarter of New Jersey’s long-term liabilities.  Truth in Accounting focuses on the burden on taxpayers for ALL of New Jersey’s long-term liabilities, particularly its massive unfunded pension and retiree healthcare liabilities.

Here are the grim details for New Jersey:

• New Jersey had $57.2 billion of assets as against $214 billion of liabilities, making for total debt of $156.7 billion.  Divided among all New Jersey taxpayers, that comes to $42,500 per taxpayer.
• The biggest chunk of debt came from unfunded pension liabilities, which made up $84 billion of the total debt.  This number was unchanged from the year before despite Murphy’s making the full, required $7 billion pension payment and strong investment returns, which again underscores the need to reform state pensions — an impossibility for the NJEA-friendly Murphy.
• Unfunded retiree health benefits added another $78 billion of liabilities, which New Jersey funds on a pay-as-you-go basis from the annual budget.

Once again, we note that rather than undertake the hard work of reforming the pension system, Murphy used the COVID revenue windfalls to help ramp up government spending by 60% and take good care of his government-union political supporters.  Murphy has decidedly not addressed New Jersey’s most difficult long-term financial challenges and these rankings are continuing proof of this.

Murphy will no doubt be long gone when the reckoning comes, but the data shows that he will have left New Jersey in a very poor position to deal with its future challenges.  Murphy’s priority has been taking care of his government union pals, not his state, and it shows.