Jessica Gould covers politics and public finance for WNYC.
Christie's Other Problem: NJ's Crushing Debt
Friday, January 24, 2014
Governor Chris Christie is facing the biggest political battle of his administration, with investigations into lane closures on the George Washington Bridge and the distribution of aid after Sandy. But there may be an even bigger challenge looming - a new report says a massive level of debt puts New Jersey dead last for fiscal solvency.
The report from the Mercatus Center at George Mason University says New Jersey ranks last in the nation for fiscal health. The state estimates it needs more than $100 billion to cover its future pension and health care costs for retired workers. Eileen Norcross, a senior researcher at the center, said it probably needs a lot more than that.
"The size of this liability is massive and it's going to only get larger in the coming years as the benefits they pay out exceed the assets in the fund," she said.
Basically, the money available to future workers is getting smaller as the state's debt is getting bigger. Norcross compared it to when you pay just a portion of your credit card bill and end up with a bigger balance due the next month.
The debts go back decades and Christie has moved to reform retiree benefits, but Norcross said the state must do much more.
The governor is expected to release his budget next month.