A new national economic report ranks New Jersey near the bottom of the barrel in economic performance and outlook.
The American Legislative Exchange Council ranked New Jersey 49th out of 50 in economic performance and 46th for economic outlook.
The “Rich States, Poor States” report shows neighboring New York ranked 50th for economic outlook, but it ranks 19th for performance; and Pennsylvania is ranked 35th for performance and 38th for outlook.
“This is a dubious distinction for New Jersey that hasn’t improved much over a decade, and it’s certain to continue sending companies and their employees to more competitive states,” said the National Federation of Independent Business state director in New Jersey, Laurie Ehlbeck. “Dramatic figures in the report show New Jersey taxpayers are leaving the state in droves. Unless there are policy changes, there will be fewer and fewer tax dollars coming in.”
The rankings are based on 15 factors that are equally weighted, including the top tax brackets for income and corporate tax, income tax progressivity, property and sales and other tax burdens, inheritance tax, recent taxes through legislation, public employee population, state liability, debt service to tax revenue ratio, state minimum wage, workers’ compensation costs, right-to-work state status and tax expenditure limits.
New Jersey has been known to have a significant tax burden and high cost of living, and pairing those with the tax proposals from the new Gov. Phil Murphy administration only enhances the negative outlook.
Michelle Siekerka, CEO and president of the New Jersey Business & Industry Association, said it comes as no surprise.
“Our business climate rankings — we’re always at the bottom. We’re a high-cost, high-tax state, high value for the buck. But as you’ve heard me say all the time, we can’t afford super premium, we’ve got to cool our heels a little bit and put our foot on the brake a little bit and pay attention to job creation in a responsible manner in the state,” she said.
One of the bigger potential concerns with the outlook is if it affects Amazon’s interest in Newark for its new headquarters.
“I think the Amazon situation is a unique one. They’ve honed in on Newark because there is incredible stuff going on in Newark,” Siekerka said.
The economic performance ranking included looking at a nine-year period when 516,326 residents left the state.
“At the same time as this very negative economic report is released, our legislators are piling costly labor mandates on the backs of small businesses such as paid leave, and a proposal for a $15 minimum wage,” Ehlbeck said. “Ill-advised policies like these will only make the Garden State die on the vine as other states bear fruit.”