In an op-ed published on NJ.com, Scott Shepard, the author of a new study on New Jersey pensions published by the Mercatus Center at George Mason University, paints a bleak picture of New Jersey's ability to meet its pension obligations and advocates for measure that will provide immediate and long-term savings.
Garden State Initiative President Regina M. Egea was quoted in an ROI-NJ piece by Anjalee Khemlani on reactions to the report released by the Economic and Fiscal Policy Review Workgroup created Senate President Steve Sweeney:
“What was striking in the report was a lack of a plan of action,” she said. “Recommendations that do not include costs to implement and expected savings, along with a timeline of implementation, is not really a plan; but, rather, another committee report.
“Without a commitment to implement, residents and business leaders are likely to see this as just another report that will take its place on a shelf collecting dust,” she said. “It was heartening to see to the report include the recommendations on health benefits made by the Byrne-Healey Commission, albeit without mentioning their report.
“Unless we are willing to tackle the 800-pound gorilla in the room, which is the unsustainable level of payment of pension benefits, which this report fails to do, things like … consolidation and shared services are distractions that just nibble at the edges of our financial crisis.”
The editorial board of the Asbury Park Press takes a dim view of the chances of meaningful reform coming from the report issued by Senate President Steve Sweeney and his New Jersey Economic & Fiscal Policy Working Group citing the power of public employee unions and the reluctance of Governor Phil Murphy to “to alienate the unions or to take steps to relieve the property tax burden in New Jersey. “
In an op-ed that appeared on NJ.com, Thomas J. Healey, a co-chair of the Pension and Health Benefits Commission (PHBC) formed by former Gov. Chris Christie and assistant secretary of the Treasury under President Ronald Reagan, addresses the very deep hole that New Jersey faces in coming years due to health benefits and pensions owed to public employees.
In an op-ed that appeared on NorthJersey.com, Tom Byrne, who was Chairman of the State Investment Council and served as a member of the New Jersey Pension and Health Benefit Study Commission in 2014-17, offers a dire warning on what the state’s continued failure to address the pension and benefits crisis will mean for the state’s long-term fiscal solvency.
At Garden State Initiative, we have written at length of how Connecticut is a cautionary tale for New Jersey when it comes to economic policy. In this op-ed from the Washington Post, former Indiana Governor Mitch Daniels, highlights why, states like Connecticut, Illinois, California and, yes, New Jersey, need to get their fiscal houses in order before its too late, and why, under our federal system, there is not a realistic chance of a bailout coming from Washington.
New Jersey’s Certified Public Accountants came to a strong consensus with over 75% saying that the recent budget agreement will negatively impact New Jersey’s economy, with 37% saying it will significantly impact the economy.
NorthJersey.com political columnist Charles Stile reports on Governor Phil Murphy’s reluctance to engage the “800 lb. gorilla in the room” - growing costs of public employee pensions and benefits.
“Rising debt, pension, public-worker health care and school costs threaten to gobble up every new dollar coming into the state — those costs alone represented 90 percent of new spending in Murphy's first budget. The state's ability to invest in infrastructure, dispense property tax aid and respond to emergencies will be severely curtailed.”
In an op-ed on the recent state budget agreement, the Press of Atlantic City took legislators and Governor Murphy to task for a budget that was heavy on spending and tax increases. They closed with a stern warning:
“New Jersey’s high-spending, heavy-taxing big government might be working well for its officials, its union workers and a small number of subsidized corporations, but it is poorly serving the people of the state. At some point they may decide their elected officials are doing the same.”
In a July 9 op-ed former New Jersey State Treasurer Andrew Sidamon-Eristoff took apart the recently enacted budget deal:
“If I were asked to make a list of tax policy changes that would do maximum harm to New Jersey’s competitive position and long-term economic vitality, I would have a hard time improving upon the last-minute budget compromise announced on June 30.”
New Jersey faced a government shutdown late last week when its governor, Democrat Phil Murphy, squabbled with leaders of his own party in the state legislature over whose taxes to raise—those of businesses or those of wealthy individuals. In the end, officials compromised and raised taxes on both. The tax burden will increase by about $440 million in a state where residents and businesses already pay some of the nation’s steepest levies.
Gov. Phil Murphy and state Democratic leaders took turns congratulating themselves this weekend for reaching a compromise on a budget agreement that will keep the state parks and beaches open and allegedly restore responsible fiscal management in New Jersey after eight miserly years of Gov. Chris Christie.
Don’t believe the spin.
Regina Egea, president of Garden State Initiative, said in an email Sunday morning that the budget deal was a bad one.
“Taxpayers and job creators are once again being treated like a no-limit credit card, which they will cut up when they flee to other states,” she said.
Egea, a former top official in Gov. Chris Christie’s administration, said the immediate consequences are apparent.
“The worst business climate in the nation continues a downward spiral,” she said. “With higher business taxes, we have created more incentives for job creators to relocate out of state.
“The exodus of taxpayers, especially those who comprise the majority of the 1 percent who contribute the 40 percent of our total income taxes collected, will continue unabated and intensify.”
In a June 24th editorial in The Wall Street Journal the paper's Editorial Board took New Jersey's leadership to task for pursuing taxation policy that is eerily similar to that which brought the State of Connecticut to the brink in recent years:
"Now that Democrats have the run of Trenton, the only questions are whose taxes are going up and by how much. Whatever budget agreement Messrs. Murphy and Sweeney may eventually arrive at, it seems likely to cement New Jersey as one of the most taxing places to live and work in America."
Regina Egea, president, Garden State Initiative
“We need look no further than up I-95 to Connecticut to see what the failure to confront our cost of government and crippling debt will lead to: anemic growth when the majority of the nation is booming, growing per capita debt, an outmigration of our best and brightest talent and the departure of good-paying jobs and businesses. According to the business leaders GSI interviewed just this past spring, New Jersey is discouraging new talent from taking executive positions located here, and our current workforce is being diluted by the highest-skilled individuals taking jobs in other states with a more positive economic outlook.
“The Legislature’s budget, while temporarily satiating our government’s appetite for spending, will push New Jersey well beyond the tax rates of our neighbors and competitor states.
“Many companies have taken the benefits of the federal corporate tax rate reduction to 21 percent to invest in their businesses and expand their operations. Several states like Iowa sensed opportunity and moved to lure those investments by reducing their own corporate and income taxes. Iowa’s statutory reduction of their corporate tax rate to 9.8 percent in the coming years gives employers confidence that the state is serious about economic growth.
“This ‘tax-first’ budget sends a clear message that the Legislature is indifferent to what it will take to make New Jersey competitive again and continues our state down a dangerous path already plowed by Connecticut.”
We will win the race to the bottom and be tied with Iowa for the highest tax on businesses in the nation.
While owning the embarrassing title of business tax leader we would also be missing an extraordinary opportunity. A key component of the recent federal tax reform was to reduce the federal corporate tax to a new rate of 21 percent.
Many companies have taken this opportunity to invest in their businesses and expand their operations. Several states, sensing opportunity, moved to lure those investments by reducing their own corporate and income taxes.
Under our current corporate tax rates, New Jersey is already a challenging environment for any employer to grow new jobs.
New Jersey has the highest per capita property taxes in the country — see 2017 average property for every state municipality below — yet all one reads about are the elected officials arguing about which other taxes need to be raised. The professionals are right, New Jersey has an addiction to spending and we need an intervention.
"The top concern on the minds of New Jerseyans is the perennial issue of property taxes, with 45 percent calling it one of the most important issues facing the state," writes Christian Hetrick about the new Monmouth University poll.
Editorial: "Now that they have the governorship as well as control of the Legislature, the state’s Democrats have wasted no time increasing the burden on New Jersey’s heavily regulated and taxed businesses."
Andrew Soergel reports on the latest Mercatus Center rankings of state fiscal health. No surprise, New Jersey is last.