Despite strong economic rebounds throughout most of the country following the Great Recession over a decade ago, New Jersey remains in the outlier of states that have yet to fully recover, according to a study by the Pew Charitable Trusts.
The study, released Tuesday, looked at tax revenue for states during the last quarter of 2018, and includes New Jersey among 10 that have not received the level of tax income seen prior to the economic downturn.
New Jersey’s economy has been considerably slower than much of the country and took a much more painful blow during the recession, according to Barb Rosewicz, a research director at Pew.
The state’s tax revenue plunged 18 percent following the recession, compared to 12.5 percent across most of the country, Rosewicz said. Meanwhile, the state had the 12th slowest population growth and the eighth slowest growth in total personal income over the past decade, Rosewicz added.
A prior Pew study from June found New Jersey was one of only three states that had yet to build up its rainy day fund following the Great Recession – the other two being Kansas and Montana.
That study was quickly seized upon by the Murphy administration, which was eager to pump money into the state’s rainy day fund, during June budget talks.
Gov. Phil Murphy ultimately put over $400 million into the fund. The move was heavily criticized by legislative leadership as the governor also froze or cut more than $270 million of spending from the Fiscal Year 2020 budget, which he said the state could not afford.
By the end of 2018, New Jersey was still 4 percent behind its peak tax revenue from late 2007, prior to the full force of the Great Recession, according to the new Pew study.
Ahead of New Jersey were Alaska, which is still 83 percent below pre-recession levels; Wyoming at 36.2 percent below its pre-recession peak; Florida, which was 8.1 percent behind; Ohio, which was 7.1 percent behind; and New Mexico which was 4.4 percent below.
North Dakota fared the best in terms of how much tax revenue it has collected since before the recession: 70.9 percent above its high point before the recession, according to the study.
Following were Colorado with a 34.4 percent increase, Oregon with a 29.2 percent increase, Washington with a 25.6 percent increase and Minnesota with a 25.3 percent increase above its peak prior to 2008.