Personal income in New Jersey rose amid the pandemic despite widespread job losses and business shutdowns, analysis by Pew Charitable Trusts found.
Personal income in the third quarter of 2020 — that’s any compensation excluding capital gains — was 7.3% higher than at the same time the previous year, outpacing 4.6% and 4.4% increases in neighboring New York and Delaware, respectively.
At 8.3%, personal incomes in Pennsylvania grew the fastest among New Jersey’s neighboring states, though New Jersey still outpaced the national average of 5.9%.
Researchers attributed much of the growth to increases in state aid — like unemployment insurance expansion, for example — and New Jersey was one of just seven states that saw a greater than 50% increase in government transfer payments from the same period in 2019.
But earnings also rebounded after dropping sharply in the second quarter, according to Pew’s analysis, which found an injection of federal relief funds responsible for the uptick. Overall, New Jersey’s third-quarter growth was the 10th fastest in the country. At 0%, Wyoming had the slowest growth in personal income.
The Garden State also saw a more modest drop in tax revenue than those experienced by its neighbors.
Here, tax collections fell by 1.9% over the last fiscal year. New York saw a drop of 8.9%, while revenue declined by 7.5% in Pennsylvania, though Delaware’s tax revenue dropped by a relatively modest 3.5%.
It’s not clear how New Jersey officials’ decision to extend the previous discal year by three months affected Pew’s figures, which measured changes in tax revenue between the first and second quarters of 2020.
New Jersey identified its first case of COVID-19 on March 4, and Gov. Phil Murphy signed an executive order shuttering most of the state’s businesses on March 16.
New Jersey may see comparisons to revenue declines in Pennsylvania and Delaware grow less favorable as time wears on. Tax revenue in those states was reduced because of delays to income tax filing deadlines.