New Jersey Struggles To Maintain Its Economic Comeback [AUDIO]
New Jersey, and many other states are facing a tough fiscal road ahead in the coming years.
That’s according to a group of national budget experts.
Richard Ravitch, Co-Chair of the State Budget Crisis Task Force says most states, including Jersey, face long-term budget burdens that are already limiting their ability to pay for basic services like police, local schools and transportation.
He says it’s no secret the Jersey pension system ” was under-funded dramatically because of years in which your Governors and your legislatures exercised their right not to appropriate money to make the contributions that were necessary to keep it fully funded…And Jersey is one of the highest taxed states in the country – and it is also a state with a lot of needs…The problem of taxes and pressures on the expenditure side of the budget are enormously complex difficult questions.”
At the same time he points out, “Medicaid expenses are growing faster than revenues, and retirement obligations are looming…State revenues have problems – with more and more transactions occurring on the internet – therefore they escape sales taxes…And many states don’t know what the changes in the federal tax law will do to their own revenues, so there’s a higher degree of volatility- so that’s a problem.”
Ravitch adds another big problem is federal budget cuts – and no recognition “at the federal level of the fact that certain federal budget cuts could have a devastating impact on states and local governments…And research shows that every state, including Jersey, has been using one-shots -they used gimmickry to kick the can forward- they used borrowed proceeds to balance budgets…It’s not going to be easy.”
The Task Force will issue a separate report, focused solely on New Jersey, in September.