NJ tax collection not what it used to be before recession
A new study on the fiscal health of states finds New Jersey continues to struggle a decade after the end of the Great Recession.
“Some states are still coping with the fallout of what was the greatest economic downturn since World War II and New Jersey is one of 16 states in which their tax revenue still has not gotten back to the level that it had been before it fell during the Great Recession,” said Barbara Rosewicz, a project director at the Pew Charitable Trusts.
“New Jersey’s tax revenue is still 4.5 percent below where it had been in late 2007, so therefore it has less purchasing power than it had 10 years ago," she explained.
She pointed out while most other states have done better than New Jersey, “tax revenue growth has come back more slowly after this recession than it did after the previous three.”
She noted the Garden State had an upward spurt in tax revenue collections last year, but this was likely because of federal tax law changes that encouraged homeowners to pre-pay property taxes in the last quarter of 2017.
She says the report also looked at personal income as a measure of the state’s economy.
“It’s not about how much people are getting in their paychecks, or how much household income they’re taking in, but it’s a measure in total of the state’s economy,” said Rosewicz.
“Since the recession, New Jersey’s economy, as measured by state personal income, has grown the equivalent of 1 percent a year. That’s actually the 12th slowest growth among all states.”
The analysis finds state personal income has increased the most since the end of the recession in the state of North Dakota at 3.6 percent, while growth has been slowest, 0.6 percent, in Connecticut. The national growth rate is 1.6 percent.
She noted while personal income is one indicator of the economic health of a state, another important factor are tax policies.
She pointed out Jersey’s recovery from the Great Recession is also tied to another issue.
“The state does have a long running problem with long-term liabilities. These are commitments that need to be paid off over time (such as the state’s multi-billion dollar public worker pension and healthcare deficit).”