TRENTON, N.J. – Economists say there is reason to be optimistic about New Jersey's recovery but warned on Monday that the state's constrained budget, tax structure and lagging employment gains could dampen its progress.
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Government and business officials met in Trenton for the Garden State Economic Forum to discuss the state's economy since the 2008 recession.
The conference comes as Gov. Chris Christie's administration and the Legislature prepare to begin debating the state's budget early next year. They also face a pending transportation trust fund shortfall as well as an ongoing debate over the state's public pension system, thorny issues officials are struggling to resolve.
James Glassman, an economist with JP Morgan Chase, says falling unemployment claims show the economy is recovering. And Charles Steindel, who has served as the state's chief economist in the Christie's administration, says he expects unemployment to continue to fall.
"This year feels a little better than last year because the job market feels a little better," Glassman said.
But there were dissenters at the conference, held at Thomas Edison State College.
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Jason Bram, a researcher with the Federal Reserve Bank of New York, says New Jersey's recovery has been sluggish, noting that the rate of residents delinquent on their debt is higher than the national figure by nearly three percentage points. Bram also said data show New Jersey's recovery has been slower than the nation's and especially compared to New York City.
Northern New Jersey generally has performed better than southern New Jersey, he added.
Steindel predicted that international economic problems might be the greatest concern facing the state's economy. He also said Superstorm Sandy, which struck the East Coast two years ago, was an economic headwind for the state.
New Jersey's unemployment rate has been falling. It dropped from 7.9 percent in September 2013 to 6.5 percent in September 2014, among the steepest declines in the nation, according to Labor Department data. But the rate is still below the national rate of 5.8 percent, and Steindel pointed out the state has not reached its prerecession peak in private payroll unemployment.
Tom Byrne, founder of Byrne Asset Management, cited the state's taxes and regulatory structure as constraints on the economy.
Steven Malanga, a Manhattan Institute senior fellow, said economic development generally requires state investment. But New Jersey struggles with that kind of investment because state revenues are constrained.
"The problem in New Jersey is that the next new tax dollar ... is already spoken for when it comes in," he said.
The governor generally delivers his budget address to the Legislature in February, and lawmakers have until June 30 to agree on spending levels.