The Garden State Initiative (GSI) has released a report titled “When in a Hole, Stop Digging: New Jersey’s Budget Woes and How to Address Them.” Presented by Professor Thad Calabrese from New York University, the report examines New Jersey’s structural financial challenges, especially the impact of $16 billion in COVID relief funds on the state budget.
The report discusses key areas that saw increased funding: education, poverty-combatting programs, and transportation. New Jersey’s public education system is highly regarded, ranking in the top three nationally. However, the state spends more per pupil than 47 other states, including Massachusetts and Connecticut, which are ranked higher. The report poses questions regarding the impact of increased spending and COVID relief on student learning outcomes, noting a decline as measured by the NAEP educational assessment.
In terms of child welfare and anti-poverty initiatives, additional federal funds did not significantly improve outcomes. Even with billions invested, the number of children below the poverty line increased from nearly 171,000 in 2019 to 194,000 in 2023.
Transportation also received substantial funding, yet NJ Transit’s on-time performance declined from 94% in 2020 to 89% in January 2025. The frequency of service failures increased, with distances between failures dropping from once every 89,000 miles to once every 50,000 miles.
The report suggests policy changes to enhance New Jersey’s appeal for businesses and families, such as reducing taxes for competitiveness, focusing spending on essential services, balancing the state budget, and reforming pension and retiree healthcare systems.
“This report clearly presents the state’s return on investment for taxpayers and I think the taxpayers will be disappointed,” stated GSI President Audrey Lane. She criticized New Jersey’s use of COVID relief funds compared to other states. Lane emphasized following Professor Calabrese’s recommendations, stating, “The report clearly states New Jersey’s critical economic challenges and presents a clear, practical plan to begin addressing the downward trajectory.” The budget season in New Jersey officially begins today, according to Lane.
