A new report from Moody’s finds that New Jersey is one of 2 states, the other being Illinois, ill-prepared financially for a future recession citing pension liabilities and budget reserves. John Reitmeyer of NJ Spotlight writes on the policy implications for New Jersey as the state enters the pivotal stage of budget negotiations for FY 2020.
CNBC has rated New Jersey’s cost of doing business as worst in the nation. In an op-ed in ROI-NJ, the president of Trenton-based Tektite Industries writes that New Jersey’s cost of doing business, driven by taxes and new government mandates, may drive his company to relocate across the river to Delaware.
GSI’s president Regina M. Egea was quoted by ROI-NJ’s Anjalee Khemlani in a report on the State Treasurer’s April revenue report:
“New Jersey has an opportunity to get on the more competitive track by limiting government spending and investing in what grows our economy not grows our government burden even further. Record revenue collections should not present an opportunity to look for more tax increases, but rather an opportunity to get our state back on the road to prosperity.”
As the state legislature and Governor Murphy work towards enacting a state budget by a June 30th deadline, the editorial board of the Press of Atlantic City calls for an agreement that reflects the perilous reality of the state’s fiscal health:
“New Jersey’s financial problems demand solutions, and these are reasonable given the hole the state is in. Credit-rating agency S&P Global says the state has the second worst pension funding ratio in the nation and is dead last in making progress toward funding even the bare minimum of its growing pension costs.
Gov. Murphy’s approach would dodge the fiscal bullet and increase spending further beyond what’s sustainable. That’s just digging the hole deeper.
Sweeney and the Economic and Fiscal Policy Workgroup want state government to face reality and start regaining the strength to serve the interests of the public. Sooner or later that must happen, and since later is just more painful, starting with the new budget is in everyone’s interest.”
In an opinion piece published in the New York Post, Steven Malanga of the Manhattan Institute writes on how “blue states” are continuing to sink in red ink even as the national economy is booming:
“…states face big obstacles to continued recovery. Short of cash, many states spent more than they took in for years, piling up debt or using financial gimmicks to paper over deficits. One recent study found that, stretching back to before the Great Recession, 10 states have consistently spent more than they collected — including New Jersey, Illinois, Connecticut, Massachusetts, Maryland and New York.”
In a sobering op-ed in the Asbury Park Press, Ralph Albert Thomas, CEO and executive director of the New Jersey Society of Certified Public Accountants, writes on the advice his members are giving the state’s residents and businesses:
“…a recent NJCPA member survey found that 75 percent of CPAs have advised some clients to relocate their homes or businesses out of New Jersey in order to reduce their tax burden.
New Jersey must break its destructive tax-and-spend habit by addressing the structural imbalances in its budget in order to put the state on sounder financial footing.”
In a riveting opinion piece published on NJ.com, North Plainfield resident Philip Perinelli makes a statement that thousands of longtime Garden State residents are saying each year: This is why I’m leaving New Jersey.
“…the bitterness would stay with me and increase year after year, as I watch my taxes inexorably increase and my quality of life move in the opposite direction.”
Ryan Hutchins, Trenton Bureau Chief for Politico New Jersey, reviews the latest Rutgers-Eagleton poll, conducted in collaboration with the New Jersey Business and Industry Association (NJBIA), which finds growing discontent among New Jersey residents with affordability issues and the high level of taxation in the Garden State:
“When it comes to residents’ overwhelming frustration with taxes and other financial issues in the state, little has changed in the past year-and-a-half,” Ashley Koning, director of the Eagleton Center for Public Interest Polling, said in a statement that accompanied the poll results. “New Jerseyans across the board — Democrats and Republicans alike — continue to be upset with what it costs to live in this state, what the government is doing about it, and with the idea of any new taxes.”
In an op-ed in the Asbury Park Press, Peter Reinhart, director of the Kislak Real Estate Institute at Monmouth University addressed the issue of “fairness” for taxpayers and public employees when it comes to negotiating New Jersey’s ongoing fiscal crisis:
““Fairness” goes both ways. The taxpayers who have to pay for the costs have the right to see that every reasonable effort is made to align the retirement benefits for public employees with the taxpayers’ ability to pay. Given the fiscal realities of today, it is not fair that public employees are unwilling to agree to modify their health care plans in line with what the rest of the taxpayers receive.
Public employees have the right to be treated fairly. But fairness does not include casting a blind eye to the realities of the fiscal condition of the state and the impact on the citizens of New Jersey.”
The editorial board of the Asbury Park Press takes a look at how the 2016 agreement to replenish the state’s Transportation Trust Fund has set of a recurring series of tax increases for Garden State motorists:
“The consumption of gas in New Jersey has been tamped down largely by two things: more fuel-efficient cars, including electric vehicles and hybrids, and fewer motorists from New York and Pennsylvania, where gas prices are higher, buying their gas in New Jersey. As a consequence, less gas tax revenue has been generated by out-of-state drivers. The more New Jersey raises its tax, the more it will be a factor in dampening revenue.“
In an editorial for the Asbury Park Press, editorial page editor Randy Bergmann takes a look at how Governor Phil Murphy’s policies are impacting the state’s Middle Class and how the Governor’s office refuses to define exactly what is “Middle Class” in New Jersey. GSI’s president, Regina M. Egea, was asked to weigh-in on the Governor’s approach:
"Pursuing the strengthening of New Jersey's middle class," she said, "offers two possible paths: address the income levels needed to cover the costs that continue to escalate in our state, or address the underlying factors that have made New Jersey increasingly unaffordable and unattractive to the middle class.
"The first path, inflating incomes without related productivity gains, subsidizing educational activities without direct employment/income commitment or escalating the cost of our government above inflation levels, is unsustainable," Egea said. "It will ultimately collapse under its own weight and actually undermine the economic prosperity of the very individuals they aim to serve."
John Reitmeyer of NJSpotlight.com reports on a recent review by Moody’s of New Jersey’s revenue outlook as the state looks towards the closing months of the current fiscal year and enters budget negotiations for next year. Due to recent revenue receipts far below projections set by the state’s treasurer, the report says income tax receipts need to rise by 17 percent, before adding that “it is uncertain whether New Jersey will achieve that growth.”
Of note, for his FY 2020 budget, Governor Phil Murphy is projecting an additional increase of $1 billion in income tax revenue.
The Editorial Board of the New York Post surveys the climate across the Hudson River in New Jersey and finds that Governor Phil Murphy is determined to continue with tax and spend policies that will soon trickle-down to the Garden State’s middle class:
“Indeed, state tax revenues for the current year are already falling short (up less than 3 percent when last year’s budget assumed they’d grow 7.5 percent), mainly because the income-tax take is down more than 5 percent from the year before.
Which means Murphy’s “tax the rich” approach, without serious genuine spending cuts, will soon lead to higher rates for the middle class, too.”
As Governor Phil Murphy’ prepares to give his Budget Address, Bloomberg News’ Elise Young analyzes New Jersey’s fiscal crisis and the potential for protracted political warfare between the Governor and legislative leaders of his own party:
“Governor Phil Murphy, stung by his own party’s cutthroat politics, led New Jersey to the brink of a shutdown last year when fellow Democrats blocked his tax increases. This time, budget negotiations are fraught with even deeper fiscal and political peril. “
GSI’s president, Regina M. Egea, authored the following op-ed which appeared in the Asbury Park Press following the issuance of our report Adding It All Up: New Jersey’s Opportunity to Reduce $200 Million in School Transportation Costs:
“Operational and policy changes will be where the “rubber meets the road.” Savings can be achieved in student transportation. But it will require collaboration and coordination on both the state and school district levels and perhaps most importantly a change of attitude to get beyond “how we’ve always done things.”“
Steven Malanga, the senior editor of City Journal and the George M. Yeager Fellow at the Manhattan Institute, takes a look at the failure of the big Blue State model, with a special emphasis on New Jersey and Governor Phil Murphy:
“In New Jersey, we are moving in a new direction,” Murphy wrote in his Dallas Morning News piece. An unfamiliar reader might assume that the state was catching up after years of low taxes and underinvestment. But Jersey has been one of the nation’s most heavily taxed states for decades—and its financial woes date back more than 20 years. The question that Murphy and other big-government advocates ignore: What happened to all the money?
NJSpotlight.com’s John Reitmeyer reports on the latest report in GSI’s series on the true cost of New Jersey’s government and opportunities for savings: Adding It All Up: New Jersey’s Opportunity to Reduce $200 Million in School Transportation Costs:
“taxpayers could see annual savings of as much as $146 million with better use of technology and more consolidation of student bus services, according to a new report that analyzes everything from how the state’s school districts hire bus drivers to how they design daily routes.“
John Reitmeyer of NJSpotlight.com takes a look at the contrasting style of Senate President Steve Sweeney and Governor Phil Murphy as they approach the state’s upcoming budget season. The Senate President has been aggressively holding town hall events to discuss his Path to Progress NJ proposal to reform the state’s finances, while the Governor has been sticking to scripted and tightly choreographed events.
In a New York Post op-ed, famed economists Dr. Arthur Laffer and Stephen Moore revisit their predictions on the impact of federal tax reform on high tax, big spending states like New Jersey:
“We are sticking with our warnings from last year, which are turning out to have been spot-on. If the tri-state area doesn’t reverse its taxing ways, let alone makes things worse every year, these once prosperous and dynamic states will be fiscally bled to death as tens of thousands more rich taxpayers leave.
They will escape Greenwich, Long Island and the Jersey Shore for places with warmer weather, more sunshine and income taxes as low as zero. Cuomo was right: This is “as serious as a heart attack.” Why isn’t anyone doing anything about it?”
“Commissioned by the conservative think tank Garden State Initiative, the report reinforces my long-held belief that New Jersey doesn’t have a revenue problem, it has a spending problem. The state’s $34.7 billion budget represents only about one third of all the money raised by New Jersey's 1,522 government entities – 21 counties, 565 municipalities, 590 school districts, 88 charter schools, and 257 authorities, boards and commissions. As the report notes, there is one government entity for every 6,000 New Jersey residents.”