New Jersey is already ranked as one of the most expensive states in the nation. Now, Gov. Mikie Sherrill says the state is facing a looming $3 billion budget deficit, which could make it even harder for the growing number of families living paycheck to paycheck.
The gap is driven in part by the loss of more than $3 billion in federal Medicaid funds in the coming years and the end of the $6 billion allocated to the state for pandemic relief from the American Rescue Plan Act.
Sherrill said she will address the problem by looking for cuts in programs and services, instead of raising taxes…
When will things improve?
Economist James Hughes, dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said making government more efficient, consolidating school districts and getting more towns to share services would help to lower costs, but that these steps won’t happen overnight.
“There is no magical, painless way of making the state more affordable,” he said. “It took us decades and decades to get us into the position we’re in, and it’s going to take a long time to change things.”
He said that though merging school districts can save taxpayers money, it would result in job losses.
“Cost savings often involve personnel reductions,” he said. “New Jersey has the second-highest unemployment rate in the nation, so that will be a painful trade-off.”
Hughes pointed out that some of the cost increases families are facing are out of the purview of state government.
“Supermarket food prices have increased just over 30% since the start of the COVID pandemic in March of 2020,” he said. “The best we can hope for is limiting price increases in the future.”