New Jersey Faces Deepening Fiscal Crisis, Analysis Finds
TRENTON, NJ – The Multi-Year Budget Workgroup (MYBW) at Rowan University’s Sweeney Center for Public Policy has released its annual Economic Forecast, revealing that despite positive short-term economic predictions, New Jersey confronts a more severe fiscal crisis over the next four years.
The MYBW, a bipartisan team established two years ago, aims to provide independent analysis on New Jersey’s long-term budget issues, particularly the state’s failure to implement multi-year budgeting and consensus revenue forecasting.
The forecast by Dr. Charles Steindel, the group’s chief economist, optimistically suggests that inflation will decrease, and the economy will grow without a recession.
However, the state’s fiscal outlook is bleak, with projections indicating an 80% chance that revenues will fall $3.2 billion to $7.1 billion short annually of the necessary funds for state programs and aid from FY25 to FY28. In a less optimistic scenario, this shortfall could total between $16 billion and $25 billion over the four years.
For the Fiscal Year 2024, the state budget proposed spending that exceeds anticipated revenues by $1.55 billion, planning to use the surplus to bridge the gap.
Although the surplus remains near record levels, the discrepancy between expected revenues and the costs of maintaining government services and funding state aid is significant. The Current Services Budget, assuming a 3% growth for most programs, projects state spending to increase significantly, highlighting the urgency of the fiscal challenge New Jersey faces.