A Hike in the Corporate Tax Would Only Hurt NJ's Competitiveness

State Senate President Steve Sweeney's proposal to put a 3-percentage-point surcharge on corporate taxes means N.J. would be tied with Iowa for the highest state rate in the nation. Sweeney sees raising the corporate tax rate from 9% to 12% as a way to avoid implementing the "millionaire's tax," which was a cornerstone of Gov. Phil Murphy's campaign. Murphy has said he would consider the hike in the corporate tax in addition to the "millionaire's tax" and not just as an alternative.

Pursing either of these tax increases would be another reason N.J. lands at the bottom of national rankings of economic competitiveness. The Tax Foundation already puts N.J. at 50th in the nation in its State Business Tax Climate Index Ranking. Tying Iowa as the most expensive place for companies to do business is not the way to attract jobs or grow the economy.

GSI President Regina Egea tackles this topic in her op-ed, "Making N.J. Less Competitive for Jobs, Business … Again," for ROI-NJ.com. Read it here.

Gov. Murphy Creates A Jobs Council Without Any Representation From The Private Sector

Let’s applaud Gov. Phil Murphy for putting job creation on his agenda. The governor signed an executive order establishing a Jobs and Economic Opportunity Council to provide advice and recommendations “for stimulating job growth and workforce development.”  It’s hard not to notice, though, the lack of any individuals from the private sector on the council.

Comprised of more than a dozen heads of state departments and other government employees, the council doesn’t include one job creator. It's clear that the insights and experience of leaders of key industries are essential to any exploration aimed at discovering how to promote job growth or workforce development.

New Jersey lagged the country by two years in rebounding from the recession with private-sector job creation, according to the GSI report “Connecticut’s Fiscal Crisis is a Cautionary Tale for New Jersey.” Research by Stephen Eide shows that NJ’s private-sector job recovery did not pass its pre-recession peak (Feb. 2008) until Feb. 2016. The national average for a rebound was March 2014.

The executive order, according to the governor’s office, will “mandate that the Council formulate recommendations related to national and state economic trends, possible government action to expand employment opportunities, sources for infrastructure funding, priorities for federal and state-funded programs, and the development of software technology to improve services for job seekers.”  

Given the constrained financial condition of our state, New Jersey needs less federal- and state-funded ideas, and more understanding of what our job creators need to grow right here.


'You can’t tax your way to prosperity,' writes GSI in The Wall Street Journal

'You can’t tax your way to prosperity,' writes GSI in The Wall Street Journal

No matter what this year’s gubernatorial candidates may say, painless solutions to New Jersey’s fiscal challenges don’t exist. The state’s budget may be balanced on a “cash” basis, but a massive structural deficit lurks beneath. New Jersey’s property taxes, already the highest in the nation, are being driven up further by the state’s pension burden and escalating health-care costs for government workers.

A useful comparison is Connecticut, which has tried to tax its way out of a similar set of problems. The two states have much in common: a relatively low poverty rate, high levels of personal income, a dependence on New York City, and unsustainable pension costs. The Pew Charitable Trusts ranks New Jersey and Connecticut as having among the worst-funded pensions in the nation.

Connecticut’s Fiscal Crisis Is a Cautionary Tale for New Jersey - A New Report by GSI

Connecticut’s Fiscal Crisis Is a Cautionary Tale for New Jersey - A New Report by GSI

Connecticut provides a cautionary tale for the next governor of New Jersey, according to a report from the newly launched Garden State Initiative. With its “severe pension underfunding, a high tax burden and politically powerful government unions,” New Jersey is facing challenges that have already placed it near the bottom of national rankings of fiscal health, according to the author of the report, Stephen D. Eide of the Manhattan Institute. One of the only states to fare worse in recent years has been Connecticut, which mirrors New Jersey in many ways.  

Tax policy is one of the major themes of the campaign for governor of New Jersey. Since the Great Recession, the Garden State has cut some taxes and avoided raising income taxes, which has helped its recovery. Connecticut, however, boosted already-high taxes, counted on economic growth that didn’t materialize and now faces the repercussions, according to the 16-page report, “Connecticut’s Fiscal Crisis is a Cautionary Tale for New Jersey.”

Click here to download the PDF of the full report.

A Fiscal Crisis in New Jersey

A Fiscal Crisis in New Jersey

New Jersey has a serious fiscal crisis on its hands, a crisis with two interrelated culprits: 1) painfully high taxes driven by 2) unsustainable public spending which includes out of control pensions reflected in unfunded liabilities. Our collective inaction is driving both residents and businesses to flee elsewhere. Even while the tax burden grows, essential services are increasingly being crowded out due to rising costs associated with the state’s public workforce.

The costs to New Jersey’s citizens and businesses are increasing by the year. They feel frustrated, marginalized, and powerless. With New Jersey’s tax climate for business ranked 49th by the Tax Foundation, and a ranking of 48th by Forbes magazine when examining the best and worst state tax burdens, it is no wonder that according to recent Gallup and Monmouth polls nearly 50 percent of New Jersey’s residents want to leave the state.