New Jersey has enjoyed three straight years of positive economic growth, but its rate of gain — as measured by the state’s gross domestic product — lagged all but four states, according to statistics released yesterday by the federal Bureau of Economic Analysis.
The new numbers indicate how slowly the state has climbed out of the recent recession, despite efforts by Gov. Chris Christie to boost economic development with a series of business-tax cuts, reduced regulation, and aggressive use of corporate-tax incentives.
Still, state business leaders yesterday hailed another year of gross-domestic product growth. Christie’s critics say the new figures provide proof that the state is going in the wrong direction and that the governor’s priorities are mixed up.
In all, New Jersey’s gross domestic product grew by 0.4 percent in 2014, according to statistics released by the bureau, which is a division of the U.S. Department of Commerce. It marked the third straight year of economic improvement, following 2012, with growth of 2.5 percent, and 2013, which saw 0.8 percent growth.
But in the national picture, New Jersey ranked 46th among states, coming in ahead of only Maine, 0.2 percent; Virginia, 0 percent; Mississippi, -1.2 percent; and Alaska, -1.3 percent. The states that enjoyed the best growth were North Dakota, 6.3 percent; Texas, 5.2 percent; Wyoming and West Virginia, 5.1 percent; and Colorado, 4.7 percent.
New Jersey’s growth figure was also the worst for states in the Mideast region, which includes New York, 2.5 percent; Pennsylvania, 1.8 percent; Delaware, 1.2 percent; and Maryland, 0.8 percent. And New Jersey trailed the overall 1.7 percent economic growth enjoyed in the Mideast region last year, as well as the national rate of 2.2 percent, according to the bureau’s statistics.
Michele Siekerka, president of the New Jersey Business and Industry Association, said evidence that the state has experienced economic growth for a third-straight year is encouraging.
“I think the positive message is three years of growth, albeit slow and steady,” Siekerka said.
Her organization’s 2015 Business Outlook survey also points to signs that businesses in the state are growing more confident. More than 50 percent of those surveyed said they expected sales to increase in 2015, and 61 percent expected to give their employees raises this year.
But there are also less encouraging signs. New Jersey’s unemployment rate, despite some improvement over the past year, remains at 6.5 percent, a full percent higher than the national average.
And state revenues, despite some recent modest gains, have not grown with the force Christie once thought they would when he committed the state to a pension-payment plan that was a big part of a 2011 reform law that sought to restore the health of New Jersey’s chronically underfunded pension system.
Last year, after tax collections fell short of the governor’s projections by more than $1 billion, he was forced to go back on his promise to increase state pension contributions. Christie’s subsequent cuts led to a lawsuit filed by public-employee unions, and that set the stage for this week’s state Supreme Court ruling that determined a big part of Christie’s reform law is unconstitutional.
New Jersey last year also struggled with a series of casino closures in Atlantic City that took a toll on the broader state economy.
Gordon MacInnes, president of New Jersey Policy Perspective, a liberal Trenton-based think tank, said the remedy for the state’s economic woes is more investment in education, public transit and transportation infrastructure and colleges and universities.
“You can’t create a strong economy and create jobs without a strong foundation,” MacInnes said. “Over the past five-and-a half-years, New Jersey has let its foundation erode while advancing billions of dollars in tax cuts for businesses and billions more in tax breaks for profitable corporations.”
“The results — a stagnant economy, increasing poverty and more New Jerseyans struggling to make ends meet — are clear, and today’s findings from the Commerce Department are only the latest evidence,” MacInnes said.
Christie — who is now contemplating a run for president — was in Washington, D.C., yesterday speaking to The Latino Coalition. His office did not respond to a request for comment.