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Rank: 11 (Previous Rank: 10)
Budget gap (as a % of the total budget): 11.40%
Total gap: $3.7 billion
Gap before budget was approved: $2.5 billion
Additional midyear gap: $1.2 billion
The state's economic slump is due to the weak housing market and rising inflation. The state legislature passed a $32.8 billion budget that is $600 million less than last year's. New Jersey trimmed the budget by offering early-retirement incentives for state employees and through attrition and is now considering addition cuts.