TRENTON, N.J. – Garden State taxpayers remain saddled with one of the heaviest financial burdens in America.
According to the New Jersey Department of the Treasury’s latest debt report, the state carried approximately $38.6 billion in outstanding bonded debt as of Fiscal Year 2025.
But bonded debt tells only part of the story.
When New Jersey’s unfunded public pension obligations and retiree health care promises are included, the state’s long-term liabilities exceed $200 billion. Treasury estimates put the state’s net pension liability at roughly $77.5 billion and its other post-employment benefits (OPEB) liability at approximately $88.6 billion, leaving taxpayers responsible for one of the nation’s largest collections of long-term obligations.
Those liabilities help explain why New Jersey continues to rank near the top nationally for debt on a per-resident basis.
A recent Reason Foundation analysis of 2023 state financial data found that New Jersey ranks second in the nation for debt per capita, with $22,968 in liabilities for every resident. Only Connecticut reported a higher figure at $26,187 per resident.
The report also found that New Jersey is one of just 13 states with more than $10,000 in debt per resident, joining Connecticut, Hawaii, Delaware, Illinois, Massachusetts, Wyoming, Alaska, North Dakota, California, Washington, New York, and Vermont.
While state officials point to declining bonded debt as evidence of improving fiscal management, economists have long noted that pension and retiree health care obligations represent the much larger challenge. Those liabilities are paid over decades and consume growing portions of state budgets, potentially limiting future spending on transportation, education, infrastructure, and property tax relief.
New Jersey has made larger pension contributions in recent budgets after years of underfunding, helping improve the state’s fiscal outlook at least on paper. However, the state’s retirement systems remain among the least-funded in the country, and retiree health care obligations continue to add tens of billions of dollars to the state’s balance sheet.
The result is a mixed financial picture: New Jersey is borrowing less than it once did, but decades of accumulated obligations continue to place it among the nation’s most indebted states on a per-capita basis, leaving future taxpayers responsible for one of the country’s largest legacy fiscal burdens.
