Money Problems Haunt New Jersey and Its Homeowners

Money Problems Haunt New Jersey and Its Homeowners

Standard & Poor has reduced New Jersey's credit rating, the eighth reduction while Chris Christie has been governor — reportedly the most ever for a Garden State governor. Only Illinois has lower ratings among U.S. states.

The rating agency said Christie's management of New Jersey's $78 billion pension system has "significant negative implications" for the state's finances and the state's lower than expected tax revenues "put additional pressure on future budgets." An announcement on September 10  indicated that the state's budget shortfall is $275 million worse than the Christie administration thought.

Adding to the money worries of New Jersey residents are the high real estate taxes and the increase in the state's foreclosure rate, now the fourth highest in the nation behind Florida, Nevada and Maryland. In August, foreclosure rates increased 115% from a year ago and are at the highest level since January 2014. Scheduled foreclosure auctions increased 71% from a year ago to the highest level since July 2010.

The financial problems of Atlantic City's casinos are cited as a key factor in the state's increased foreclosure rate. Three of its 12 casinos have closed and another is set to close in November, leaving 6,200 casino employees out of work with another 2,800 scheduled for unemployment later this year. Foreclose activity in Atlantic City increased on a year-over-year basis in August for the 28th time in the last 30 months. It now ranks second-highest nationwide. 

Four of the five counties with the highest foreclosure rates in the state are in South Jersey. In addition to Atlantic County, they are Cumberland, Salem and Camden. The fifth is Sussex County.

To add insult to injury, Atlantic City's Revel Hotel Casino, which cost $2.4 billion to build, is being sold to a Florida developer for $90 million, according to a bankruptcy filing issued September 10. The cash bid by real estate developer Glenn Straub for Revel was accepted by the casino's owners. The casino, which opened two years ago with great fanfare, closed September 2 and never made a profit.