How does New Jersey's ‘value proposition’ stack up? - Garden State Initiative


Public Spending, ECONOMIC OPPORTUNITY FOR ALL How does New Jersey’s ‘value proposition’ stack up?

February 28, 2020


by Regina M. Egea

With every consumer purchase, we ask ourselves “Considering everything, am I getting a better value compared to my alternatives?” So too, New Jersey taxpayers, residents and job creators alike, are asking: “Considering everything, are we getting a better value from what we pay to live and work here in New Jersey?”

A review using objective measures in key areas many of us consider to answer this question include: K-12 Education, Higher Education, Road Infrastructure, Cost of Doing Business and Property Values/Taxes. 

In K-12 public education, New Jersey and Massachusetts vie for No. 1 and No. 2 on academic performance year to year nationally and regionally from one survey to the next so there’s little dispute New Jersey has a great public school system. What stands out is that New Jersey is consistently 14-30% higher cost per student vs Massachusetts or the US average. (2019 per pupil: New Jersey $16,543; Massachusetts $14,529; US $12,756). If New Jersey spent 14% less (matching Massachusetts per pupil), New Jersey will save over $3.5 billion annually.

In Higher Education, New Jersey had a Top Ten ranking of #8 in 2019 but that’s down from No. 4 when we tied with North Carolina in 2016 and then No. 5 in 2017.  Who’s No. 1? Virginia in 2017, 2018 and 2019.  Data shows that schools in Virginia offer a 20-year average return on investment of $417,711 while New Jersey is $341,258 or almost 20% lower than the No. 1 state. In our region, Delaware beat us with a 27% better ROI ($434,908 ROI).

As a commuter-heavy state, situated between two centers of commerce, New Jersey’s road infrastructure is the lifeblood of our economy. How are we performing? North Dakota, Virginia and Missouri have the best performing, most cost-efficient state highway systems, while New Jersey, Rhode Island and Hawaii have the worst according to the Reason Foundation in 2019. The report goes on to say “Despite spending more money per mile than any other state, New Jersey has the worst urban traffic congestion and among the worst urban Interstate pavement conditions in the country.” Total cost per mile of $511,266 in New Jersey versus Virginia at $37,875 or the US average of $71,117. Our top regional competitor? Pennsylvania ranked No. 35 with a cost per mile of $101,129 or 4 times lower than New Jersey.

When evaluating the atmosphere for business, it’s best to look at trends. In 2011 CNBC ranked New Jersey as high as No. 30 but by 2018 and again 2019 New Jersey remained at No. 36 with grades of C or lower in 6 out of 10 categories. Virginia had fallen to No. 13 in 2016, then was No. 4 in 2018 and regained the No. 1 spot in 2019. They scored B or better in 7 out of 10 categories in spite of this comment from CNBC “The Old Dominion regains the Top State crown with a great workforce and strong education, but costs are extremely high.” Massachusetts is tops in our region having climbed back to No. 14 in 2019 from a position of No. 28 in 2012. Massachusetts scored a B or better in 7 out of 10 categories in 2019.

Last but certainly most prominent on New Jerseyean’s minds is Property Taxes.  None of us expect New Jersey to suddenly become the low cost state.   We’ve seen other states try to claim this position by stripping down services, or reducing investments in education, or letting assets like bridges deteriorate to dangerous levels.  That’s not what wins in the long term.  Remaining however, year after year at the bottom position of having the highest property taxes in the country, whether on a percent of income, or based on percent of home value, makes NJ a punchline, not a role model.

No longer can we shrug our shoulders saying “that’s how it is in New Jersey….take it or leave it” because now more are leaving than taking it. 

The next  Census report is expected to show New Jersey lost population.  IRS data has shown $28 billion in wealth has left the state in the last 15 years.   Large employers with marquee names like Honeywell, Mercedes and Hertz pulled up stakes for greener pastures down south.

There‘s a bright light shining on other states who are winning great jobs and attracting new residents. NJ can win again if we objectively evaluate just how uncompetitive our Value Proposition actually is today and to make long-needed changes starting now.

Regina M. Egea is president of the Garden State Initiative, an independent research and educational organization dedicated to promoting new investment, innovation and economic growth in New Jersey.