As Governor Murphy and legislature leaders continue negotiations over a replacement for New Jersey’s expired tax incentives program, the editorial board of the Press of Atlantic City offers a reminder that the necessity of the state’s incentive program is a result of a non-competitive business climate and inability to control spending:

“No wonder state government has to pay major businesses a lot of money to locate here or just remain here. And since that lost tax revenue isn’t offset by spending cuts, it must be made up by residents and businesses already here paying more.

Gov. Murphy has made things worse by levying $2 billion in new taxes. His focus on the details of tax incentives is a distraction from the failure of him and his party to control spending and address state government’s crushing $200 billion in debt and government employee benefit obligations.”

NJSpotlight.com’s John Reitmeyer takes a look at the underlying story of New Jersey’s job market and broader economy, finding that it is not as rosy as Governor Murphy projects when discussing the state’s unemployment rate:

“While New Jersey’s unemployment rate has been steadily dropping over the last six months, the state has also shed thousands of jobs, including in some key industries. And even as Gov. Phil Murphy has been quick to tout the drop in unemployment, business interests are focusing on the state’s poor rankings in other economic indicators.”

The editorial board of the Press of Atlantic City takes Governor Murphy to task over his recent comments at a gathering of business leaders at Rowan University where he appeared indifferent to New Jersey residents and businesses impacted by high taxes:

“Politicians in democracies typically don’t say things that could suggest they’re dismissing and ignoring a significant part of the electorate. To do so requires a confidence of staying in power usually found only in places with tyrannies or one-party rule.

Murphy should consider whether his party’s dominance of state government is encouraging an unrealistic feeling of power that might undermine his persuasiveness and personal political ambitions.”

On NJSpotlight.com, John Reitmeyer reports on several troubling trends for New Jersey’s fiscal health with a possible economic slowdown looming in the future.

Earlier this year, GSI’s president Regina M. Egea authored an op-ed that suggested the crash of Connecticut’s high-end housing market may be predictive of a similar occurrence in New Jersey due to exorbitant property taxes. In a column published on NJ.com, Paul Mulshine indicates that the market decline may have finally reached New Jersey with dire consequences for the middle class:

“…as the prices drop on those high-end homes, so do the tax assessments. That creates pressure on the people in the middle-class homes in town.”

Samantha Marcus of NJ.com reports on a new analysis from S&P Global Ratings that finds New Jersey’s public employee pension fund is the worst-funded in the nation: “For the fiscal year that ended June 30, 2018, the most-recent year for which records are available, the public pension fund had enough money to cover just 38.4 percent of what it needs to provide retirement benefits to some 800,000 current and future retired workers.”

In an op-ed published on NJ.com, Tom Byrne, a former chairman of the state Democratic Party and a former chairman of the N.J. State Investment Council, takes issue with Governor Murphy’s recent assertions that New Jersey’s economy has grown stronger under his policies:

“In a recent op-ed, Gov. Phil Murphy stated that “New Jersey is getting stronger” but cited no data in support of that claim. In fact, the most recent data shows New Jersey tied for dead last among states in the mainland U.S. in economic growth so far this year.”

In an interview with Elise Young and Danielle Moran of Bloomberg, Senate President Steve Sweeney offered an ominous warning on the state of New Jersey’s finances: “Why am I yelling fire in a crowded theater and everyone else is saying that we’re fine,” Sweeney said. “We’re not. And it’s going to go up in flames. I would rather not go down in memory as the guy that told everyone the pension system was going to collapse and be found that I was correct.”

Bloomberg reported that the state’s retirement system had about $82 billion of assets in 2018, only 38% of what it needs to cover checks that are owed in the decades ahead. That’s lower than any other state system in the U.S.

Garden State Initiative’s president Regina Egea was interviewed by TaxNotes.com’s Lauren Loricchio on the concept of New Jersey entering into a multistate tax incentives truce:

“However, Regina Egea, president of the conservative think tank Garden State Initiative, was skeptical that such a compact could work, pointing out that the Kansas-Missouri compact is regional. "I haven't seen anything that would indicate that [Kansas and Missouri] think there's enough commonality of interest that they would expand that to the state level," she told Tax Notes August 16.

Egea said she can't imagine why Cuomo or Wolf would support such a truce because they have more favorable tax environments for businesses. "As long as we insist on keeping our tax rates so high, we'll be required — just to level the playing field — to use incentives," she said. “

In an op-ed published on NJ.com, Jared Walczak, the director of state policy at the Tax Foundation, takes apart the latest lawsuit filed by high tax states against the IRS on the SALT deduction cap:

“…this lawsuit may be more about posturing than law. It’s about supposedly progressive states trying to shield their high earners from the consequence of their own state tax laws, or at least about looking like they’re trying to do so. It’s a stunt in service to a shell game. Your tax dollars at work.”