The Garden State Initiative’s Economic Policy Forum drew a list of big-name economists, thought leaders and politicians to the Hyatt Regency in New Brunswick on Wednesday afternoon.
But the words of Arthur Laffer, skyped in from Tennessee, stole the three-hour event.
Laffer compared New Jersey’s struggles with taxes to those of someone struggling to escape the grip of drugs or alcohol.
“New Jersey has become addicted to government spending, forced union labor spending, taxes and regulation,” he said. “Those three are killers. You cannot tax an economy into prosperity. It just doesn’t happen.
“New Jersey, in all honesty, needs an intervention.”
This type of discussion and honesty was the goal of GSI, a nonpartisan think tank founded by Regina Egea.
Egea, a former Christie administration official, said her group wanted to bring all sides together to talk about the financial issues New Jersey faces, and feels she did so.
Participants on the panel with Laffer included noted economist James Wetzler and Wall Street Journal editor James Freeman.
A second panel featured Assembly Minority Leader Lou Greenwald (D-Voorhees), as well as state Sen. Steven Oroho (R-Sparta) and former state Investment Council head Tom Byrne.
EY economist Andrew Phillips also gave a presentation.
“Diversity of opinion from a political point of view as well as industries is important,” Egea said. “We are really trying to be inclusive in the conversation. What I found most interesting was the agreement level around affordability and the taxes. Whether it’s property tax or sales tax or business tax, there was general agreement around that.”
The comments were good throughout. Here is just a small sample:
Byrne, when discussing Gov. Murphy’s proposed millionaires’ tax, said it will not solve the bigger issue — outmigration of revenue:
“You’re talking about a billion dollars, annually, of tax money that’s out of here,” he said. “And that number has been increasing dramatically to the point that it was $3.4 billion in the most recent year.
“If you put in a millionaires’ tax and these trends continue, let alone accelerate, you’ll wash away the benefit of a millionaires’ tax in five to six years.
“A millionaires’ tax may prevent a fiscal heart attack, but it may also cause long-term economic cancer.”
Oroho discussed the high cost of government:
“Sen. (Stephen) Sweeney and I have been talking about the total cost of government for a long time,” he said “That’s just the start of it. The issue becomes, how do we restructure our taxes, so we can actually have real property tax relief? And that’s one of the things that we’re looking at.
“Other states are successful (often) by passing off some of the tax burden to people outside of the state, as we did with the TTF. Then, we have to deal with the health benefit cost and the benefit cost.
“It takes time and discipline. We didn’t get here overnight, and we’re not going to get out of this overnight. If we don’t deal with that total cost of government, then we’re never going to get there.”
Greenwald talked about on property taxes:
“It’s so interwoven in how we pay for local government that shifting is difficult,” he said.
“Complex pieces of public policy like arbitration reform, property tax caps, eliminating dual office holders — all of those things we’ve done over the years have had significant impact, but they won’t do anything to lower the property tax.
“We have to figure out how, as New Jerseyans, we can create a tax code that creates a competitive advantage for us, because we have great assets here. There is a small window of opportunity to do this.
“If you want to get New Jersey competitive, you have to look at what are successful tax models around the country that could be implemented here. It’s about New Jersey’s competitiveness.”
Phillips said New Jersey is not — at least when it was compared with five other states (Connecticut, New York, North Carolina, Ohio and Pennsylvania) in a recent report.
“New Jersey corporate tax is not particularly competitive,” he said. “New Jersey has the second-highest corporate tax rate among our benchmark states.”
One of the many listening in was Bob Hugin, the former Celgene head who is trying to win a U.S. Senate seat.
“I think the event was very constructive, we need to bring people from both sides together,” he said. “If we don’t have bipartisan discussion on these issues, we’re in trouble.
“That being said, I think the discussion today was very sobering. The economic outlook and the job outlook in New Jersey is pretty dire, and taxes are a big part of that.”