Garden State Initiative President Regina M. Egea issued the following statement after the announcement of a budget agreement between Governor Murphy, Speaker Coughlin and Senate President Sweeney:
“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.
The immediate consequences are apparent. The worst business climate in the nation continues a downward spiral. 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% who contribute the 40% of our total income taxes collected, will continue unabated and intensify.”
GSI Budget Analysis & Comparative Review
This budget is called “shared sacrifice.” The only one not sharing the sacrifice is our government as compared to other states:
Compared to Massachusetts, which Governor Murphy cited as a model, New Jersey is suffering: Massachusetts’ personal income tax rate is 5% or less than half of what is being proposed by Governor Murphy. New Jersey’s current corporate income tax rate is 9% versus Massachusetts’ 8%. Property taxes are also a lot lower in Massachusetts ($37 per $1,000 of personal income) than they are in New Jersey (over $51 per $1000 of personal income, 3rd highest in the nation). Even sales taxes are lower in Massachusetts than they are in New Jersey. Workers compensation costs in Massachusetts are $1.29 per $100 of payroll, while New Jersey’s workers compensation costs are $2.92 per $100, 2nd highest in the nation.
Compared to Indiana, New Jersey is suffering: Indiana’s population is about 6.7 million, ours is 9 million. Accounting for the difference in population, we would need to shed 20,000 state jobs to have the same sized state government as Indiana. (But wait a minute. Indiana must have tons more municipal employees, right? After all, how can a state possibly survive? Yeah, well, not so much. New Jersey has about 339,000 local employees, Indiana 232,000. Allow for population difference, we’d still have nearly 30,000 more municipal employees than Indiana. (Trentonian 6/27/18) There are less expensive and higher performing state and local government operations around the country. Why are we so arrogant to think only we know how to build an efficient government?
Compared to Connecticut, we are both suffering: Connecticut has ranked as one of the four slowest-growing states in four of the last seven years. It has lost population in each of the last three years. General Electric, in January 2016, announced that they would be re- locating their corporate headquarters from Connecticut and did so the following year. Connecticut’s willingness to raise taxes has probably kept its bond rating above New Jersey’s, but it is still one of the lowest-rated states.
As long as the only solution to better government in NJ is to increase the tax burden on corporations and residents, we will all suffer with a slow economy, bloated government, and be the target of derision by other state’s officials about how easy we make their successful recruitment of both our residents and job creators.
The Garden State Initiative is a 501(c)3 nonprofit organization dedicated to strengthening New Jersey by providing an alternative voice and commonsense policy solutions in the state -- solutions that promote new investment, the growth of businesses, the creation of economic opportunities, and innovation to the benefit of all New Jerseyans.