(The Center Square) – New Jersey is a cash-swimming state, but still faces challenges as it recovers from the economic impact of the novel coronavirus pandemic.
The state will end the year with a surplus of around $ 2.8 billion, legislative budget and finance official Thomas Koenig told lawmakers earlier this month.
But the state has $ 44 billion in debt and is caught between a rock and a hard place over what funds can be used to pay off that debt.
New Jersey has avoided some of the economic woes that crushed other states last year and placed 30th in a ranking of states most affected by the pandemic, according to WalletHub, who classified the states based on two metrics.
The first is âindustries and workforce strongly affectedâ and double weighting is given to the accommodation, food and beverage, arts, entertainment and recreation industries. States were also ranked according to the resources available to help businesses recover, giving a double weight to a state’s rainy day fund, its share of workers on paid sick leave, and the share of people who work from home.
“Heavily affected industries such as accommodation, food services, mining, quarrying, and oil and gas extraction make up only a small portion of the state’s GDP,” said Jill Gonzalez, analyst at WalletHub. âApart from these industries, the state also has a small share of retail employment and good domestic infrastructure work, which is why its jobless claims are recovering faster than in the most states. “
The state’s overall GDP grew 4.8% in the last quarter of 2020. And consumer spending has grown 7% since the start of last year, according to Gonzalez.
The New Jersey Economic Development Authority announced on April 14 an additional $ 85 million in grants for small businesses under its Small Business Emergency Assistance Grant program. Restaurants, which were hit hard during the pandemic, will receive $ 35 million of the newly available funds.
Gov. Phil Murphy painted a gloomy economic outlook last year, telling the public and lawmakers that the state needs to borrow $ 4.3 billion to weather the impact of the pandemic. The Legislature accepted the loan, which is non-repayable.
“[That] means they can’t be repaid for 13 years, so we have to bear half a billion in spending every year to not carry that debt and we have plenty of money, âsaid Regina Egea, President of the Garden State Initiative, an independent research organization.
The state will also receive $ 6.4 billion from President Joe Biden’s $ 1.9 trillion US bailout.
New Jersey has rebounded from job losses and recent increases in first applications are attributed to the local school system’s spring break schedule, according to reports.