NJ Legislature, ECONOMIC OPPORTUNITY FOR ALL
Only a More Balanced Approach to Public Policies Can Improve NJ’s Economy – GSI
By Regina M. Egea, President, Garden State Initiative
Economic growth is never driven nor undermined by just one policy decision. Clear-eyed analyses of what underlies our current performance needs to guide any policy choice.
New Jersey’s 7.3% unemployment rate tied with Connecticut for 5th highest in the US and was only exceeded in our region by New York at 7.6%. Elsewhere in our region, New Hampshire discontinued the $300 federal supplement on June 19th, offered a $1,000 bonus for those returning to full-time work and just posted a 2.9% unemployment rate, good for #3 in the country. Their top Business Tax rate is 35% lower than New Jersey, no Personal Income Tax, no Sales Tax and a Gas Tax, even with the election-year announcement of our reduction, is still significantly lower than ours. Even without all these other taxes, their property tax rate is lower than New Jersey (1.89% vs. 2.13% when calculated as percent of home value).
As to consumer demand, it has not waned; it remains strong. Government restrictions can dampen it temporarily but not extinguish it. The lower economic outlook that several retailers cited recently is due to supply issues, not demand. Difficulty in getting product onto their shelves is the greatest risk to the US economy right now. This is why in New Jersey our hospitality and other service businesses are frustrated by the stubbornness and one-size-fits-all approach to New Jersey’s current policies. Nearly every retailer has Help Wanted signs and frequent reduction of hours of operation due to labor shortages…not product.
With Tourism as our #2 sector and overseas travel restricted, our economy should be flourishing right now. If our state struck a better balance in both tone and policy between health policies and what businesses need to meet consumer demand, questions of a $300 federal supplement to individuals, or consuming federal funds for small business grants or loans, or the burden of replenishing the Unemployment Trust fund (which represents a significant new tax on businesses), would all be moot.
The lack of clarity around what goals we have for which metrics in order to inform changes in New Jersey’s policies, is driving widespread uncertainty across our state. Other states are exhibiting confidence in their decision making aided by full transparency of their goals and are pulling ahead of us every day. The very low barriers to exit our state for both businesses that can operate virtually, and residents who also can work virtually where there is a much lower cost of living, make reversing these policy decisions essential….immediately. If we do not, everyone who remains in New Jersey faces a costly and elongated recovery.