X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

TRENTON-New Jersey and eight other states are on the same path toward economic disaster as California. That’s according to a report released yesterday by the Pew Center on the States titled “Beyond California: States in Fiscal Peril.”

Joining California on the list of the 10 most troubled states are: Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. Pew researchers analyzed the factors that have contributed to California’s fiscal woes, then determined which other states were experiencing those same difficulties. Specifically, those challenges include: loss of state revenues; the relative size of budget gaps; increasing joblessness; high foreclosure rates; legal obstacles to balanced budgets, such as a supermajority requirement for tax increases or budget bills; and poor money-management practices.

According to Pew, these budgetary problems can have severe ramifications for those states’ residents in the form of higher taxes or fees; layoffs or furloughs of state workers; longer waits for public services; more crowded classrooms; higher college tuition and less support for the poor or unemployed.

Moreover, these states’ woes go beyond just their own borders and can impact the nation as a whole. Together, the 10 states account for more than one-third of America’s population and economic output. Actions taken by state governments to balance their budgets–such as tax increases and drastic spending cuts–can slow down the country’s recovery, says state Pew researchers.

“A challenging mix of economic, political and money-management factors have pushed California to the brink of insolvency,” says Susan Urahn, managing director of the Pew Center on the States, in a release. “But while California often takes the spotlight, other states are facing hardships just as daunting. Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers.”

In particular, New Jersey was cited for having persistent shortfalls between what it collects in revenues and what it spends. Also, the collapse of Wall Street–which supports approximately one-third of New Jersey’s economy–exacerbates the problem. Growing debt payments and perennially underfunded pension systems will make the Garden State’s road to recovery even rougher, writes the report.

New Jersey lawmakers, noted the report, have postponed making long-term fixes to their fiscal imbalances. “In some states, including California, Illinois and New Jersey, lawmakers punted the responsibility–either by asking their voters or governors to make the call, or by borrowing or using accounting methods to put off the hard choices until later,” states the report.

GlobeSt.com will follow with reaction by state business leaders to the report.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.