New Jersey's tax revenue remains significantly down since receipts began to plummet from the 2008 recession.
The Garden State collected 10% less in tax revenue during the 2014 fourth quarter at $7.6 billion than it did in the third quarter of 2008, according to a June 11 report released by Pew Charitable Trusts. New Jersey was among eight states where tax revenue was down 10% or more in this five and half-year period.
Rutgers University economist Nancy Mantell said the major drop in tax revenue is driven largely by fewer income tax filings, because the state has not caught up with pre-recession job levels. The state's unemployment rate improved to 6.6% last year from a high of 9.5% in 2010, but remains well below the 4.3% level reported in 2007, according to the New Jersey Department of Labor.
"Employment is still not at the point it was before the recession," said Mantell. "Until there is solid job growth in the state they will still be catching up."
New Jersey Treasurer Andrew Sidamon-Eristoff reported in April that 2015 state revenues through March totaled $18.43 billion, a 5.3% increase from the 2014 fiscal year. He projected total revenue in fiscal 2015 would be $32.6 billion, a net reduction of $59 million.
New Jersey's credit rating was cut one notch to A2 by Moody's Investors Service with a negative outlook on April 16 due largely to struggles funding the state pension system. The nonpartisan Volcker Alliance released a June 8 report criticizing New Jersey's budget practices, saying the state has "inconsistent management" with its revenue collections.