As New Jersey legislators and businesses push aggressively for immediate funding to recover and rebuild after Hurricane Sandy, an analysis released today by Rutgers shows the expenditure of that money will push economic activity above what had been forecast for the state through 2015, absent the storm.
According to the report by economists at the university’s Edward J. Bloustein School of Planning and Public Policy, the availability of reconstruction funding of at least $25.1 billion from private insurance companies and public aid programs would more than offset the significant economic damage in the fourth quarter of 2014 from Sandy, which includes $7.1 billion in state gross domestic product losses, 4,200 lost jobs and $82 million in lost state tax revenue.
However, the report said its forecast is “in no way meant to imply that New Jersey has benefited, or will benefit, from the storm.”
“The damages, both human and economic, are enormous and real. What is not yet real and accomplished is the spending of the necessary resources to fully repair and rebuild,” the report said. “Only if the state obtains the resources needed to fund the offsetting recovery and reconstruction expenditures will the substantial negative economic and fiscal impacts of the storm be neutralized over time.”
But the report warns that even if the state is successful in its pursuit and expenditure of those resources, factors such as complex strategic tax decisions spurred by uncertain federal fiscal policy could throw off the projections.
Additionally, while the report said the highest expenditures would occur this year, it noted the economic impact will be “somewhat muted” by reduced tourism spending this summer.