New Jersey’s Economic House is Crumbling, So, let’s Slap a New Coat of Paint On It

Assemblywoman BettyLou DeCroce (File Photo)

By BettyLou DeCroce

Many state policy leaders treat New Jersey’s economy as if it were a stately mansion to be admired. They pretend to noticed that the termites have eaten the columns by the front door, that the roof leaks and that the foundation has begun to crumble. If the state’s economy were a house for sale it would be listed as outdated and in need of significant structural repairs.

As the state’s chief “realtor” Gov. Murphy’s sales pitch for New Jersey is that the house just needs a coat of paint and all will be fine. The reality is the state’s economic house needs a lot more than cosmetic makeovers.

To the nation’s business community, the state is an economic eyesore. New Jersey routinely places at or near the bottom in almost every economic analysis of American states.  It has the worst business climate in the country; it has among the highest business and personal taxes; it’s overregulated; its electric utility rates are high and it has one the highest debt loads in the country. And its high property taxes are making home ownership unaffordable for middle-class workers.

Instead of addressing crucial structural issues with the state’s economy – like lowering corporate and property taxes, the leadership in this state has determined that that it’s more important to boost the minimum wage to $15, raise taxes on job producing people, legalize marijuana and lay down a welcome mat for illegal immigrants at taxpayers’ expense.

The Murphy administration tried to lure Amazon to Newark with an outrageous $7 billion incentive. Amazon thumbed its nose at New Jersey’s enticement and decided to open its headquarters in Queens, NY and Virginia – which combined offered billions less than New Jersey.

Our Wall Street governor says he is pursuing well-paying high-tech jobs, but he gleefully settles for low paying, low skill jobs.  While other states are getting Amazon’s six figure jobs, New Jersey gets Amazon’s warehouse jobs such as the one opening in Edison, which is staffed by 50 robots and many disgruntled human workers currently making less than $15 an hour. In his State of the State message, he beamed at the expansion of RealReal Inc. but the company is nothing more than an online consignment shop that pays wages ranging from $15 to $20 per hour. https://www.indeed.com/cmp/The-Realreal/salaries

While the governor pursues his Progressive “fairness economy” he is fumbling the opportunity to unlock New Jersey’s potential to attract investments that create jobs that support middle class families.

According to a recent report, the average salary in New Jersey ($57,000) is not enough to afford the average rent of $2,062. A $15.00 minimum wage will not help. State property taxes now average $8,700 a year; New Jersey has the sixth highest personal income tax rate in the nation (8.97 percent); one of the highest corporate tax rates (9 percent) the third highest per capita tax ($6,709) and the sixth highest debt.  Consequently, young people and retirees are fleeing the state – and business owners are taking note that the administration’s response to affordability is more taxes and more regulation.

If the governor is seeking a “fairness economy,” shouldn’t he be focusing on creating an environment that attracts good paying jobs for Millennials and older adults who want to own a home?  Jobs in technology and manufacturing that lift people out of poverty are going to less expensive states. Companies like Mercedes Benz and Honeywell Inc, are taking their high paying jobs to Georgia and North Carolina and it’s not hard to figure out why.

North Carolina ranks 12th on the business climate index by the Tax Foundation. New Jersey is 50th ( (https://taxfoundation.org/publications/state-business-tax-climate-index).

North Carolina’s corporate tax rate is third lowest in the nation, ours is the 47th highest at 9 percent. As a percentage of home value, New Jersey’s property taxes more than double North Carolina’s. (www.tax-rates.org/taxtables/property-tax-by-state). Georgia is ranked 33rd in business climate but last year approved legislation to lower its top individual and corporate income tax rates from 6.0 to 5.5 percent

Amidst New Jersey’s economic gloom, the governor has established commissions to develop ways to bring 300,000 good paying jobs to the state.  His Commission on Science, Innovation and Technology, is staffed with academics, who never ran a business, and owners of very small businesses, one of which is based in Manhattan and ranks 2,689 on the Inc.com list of top 5,000 companies in the U.S.

The governor has set up opportunity zones in 169 of the state’s poorest areas. But a recent report on the zones from the Tax Foundation suggest that: “…place-based incentive programs redistribute rather than generate new economic activity, subsidize investments that would have occurred anyway, and displace low-income residents….” In other words, opportunity zones, like the current state Economic Development Agency, will be of little or no help to economic growth.

Moreover, the findings and recommendations of the governor’s commissions will be irrelevant if the majority party in Trenton fails to take the actions necessary to energize the economy: cut spending and regulation, lower taxes and make the state affordable for the middle class.

If the governor’s administration is truly serious about improving the state’s economy, it will have to take the painful steps necessary to get the state off the floor of nearly every national measure of economic health. To pretend that the governor’s progressive agenda is benefitting working families is like slapping a coat of paint on a crumbling house – it looks good, but doesn’t stop the roof from leaking.

BettyLou DeCroce represents Legislative District 26 (Morris Essex & Passaic counties) and is a small business owner.

Comments

Comments