New Jersey, the third-most indebted U.S. state, faces a $10.5 billion deficit in fiscal 2012, partially the result of $3.53 billion needed to fully fund its pension contribution, the state Office of Legislative Services said.
The state also will need $2.3 billion for public schools. It also faces the loss of $1 billion in federal stimulus money, David Rosen, the agency’s chief budget officer, wrote in a July 12 memo to Assembly Democrats, who sought the information. He projected a total spending increase of $11.5 billion, and only $1 billion of higher revenue.
The fiscal 2012 estimate is based upon using existing revenue sources to fully fund all state programs and obligations, many of which Gov. Chris Christie cut to balance this year’s plan, Mr. Rosen wrote. Mr. Christie and the Democratic-led Legislature filled a record deficit of $10.7 billion this year.
“This year will be of the same magnitude,” Mr. Rosen said in an interview Tuesday. “It’s always a moving target and things could change.”
Mr. Christie, a Republican, took office in January pledging to fix state finances without raising taxes. His first budget skipped a $3 billion pension payment and lowered aid to public schools and municipalities by $820 million and $445 million, respectively. The plan also suspended property tax rebates until next year, when it will owe $2.1 billion, according to Rosen.
California and New York rank first and second in total net tax-supported debt, according to Moody’s Investors Service.