When it comes to sequestration — the automatic federal-spending cuts that will take effect if the U.S. Congress doesn’t come to a budget deal by March 1 — all states are not created equal. Indeed, the impact on New Jersey may be relatively mild, according to research by the Pew Charitable Trusts of Philadelphia. It falls in the bottom-third of states in each factor that the research looked at: federal grants; federal spending; defense spending; nondefense spending; and workforce spending.
New Jersey will see 5.8 percent cuts to federal grants, as a percentage of the state budget, while the national average will be 6.6 percent.
Federal spending on salaries in New Jersey, as a percentage of state GDP is likely to be 2.7 percent, as opposed to the 5.3 percent average nationally. Cuts to defense spending will also have less impact in New Jersey. Pew estimates 2.1 percent of the state GDP vs. 3.5 percent nationally. And other federal workforce spending will be less than 1 percent, compared with 1 percent to 2 percent nationally.
Pew was unable to determine the impact that federal tax hikes, which are also a part of sequestration, will have on New Jerseyans.