After taxing 2018, question lingers into new year: Businesses can only hope 2019 will not bring additional hikes

Tom Bracken has had enough. 

The well-respected head of the New Jersey Chamber of Commerce — an organization that speaks for the state’s business community — said it’s time for Gov. Phil Murphy to start doing more for Bracken’s constituents.

To him, that means no more taxes.

“There’s a lot we can do to make the state more attractive, and more taxes just aggravates the situation,” Bracken said.

Bracken said he was horrified when Murphy said everything was on the table, including taxes. 

And, even though Bracken said he was confident state Senate President Steve Sweeney and Assembly Speaker Craig Coughlin will not cave on the request, he knows Murphy just saying it resonates in the ears of business leaders — especially those outside state lines.

“Just him saying it sends a clear signal to any companies looking around that we are not business-friendly,” he said. 

Businesses, Bracken said, are responding.

“The biggest mistake made in the last couple of weeks was when Honeywell moved its headquarters and they said it didn’t have anything to do with taxes,” he said. “That was a total crock.

“I don’t think Honeywell is going to be the last company to leave New Jersey. If those aren’t wakeup calls, then this is: Amazon turned down $7 billion for a $1.5 billion package. That tells you something is wrong here.”

Some recent numbers tell the same story.

A new study from United Van Lines found New Jersey ranks No. 1 in the most moved-from states for 2018. The study found that nearly 67 percent of moves in New Jersey were out of state.

Then, there’s this: Despite an economy where finding workers is proving to be difficult (what’s the last store you went into that didn’t have a “Help Wanted” sign on the window?), the New Jersey workforce is actually shrinking.

During 2018, the state workforce shrank by 18,800 workers, according to its year-end report. And, over the last three years, New Jersey’s workforce is down 1 percent, while our key competitors have grown.

Regina Egea, the head of the Garden State Initiative, did the math:

  • North Carolina (which Honeywell just selected as its headquarters) has grown by over 4.6 percent;
  • South Carolina (where Volvo invested over $1 billion for its first U.S. plant to employ 4,000 workers in spite of having its headquarters in Bergen County) has grown 2 percent; and
  • Florida (where Hertz consolidated operations) has grown over 6 percent since 2015.

Don’t credit the South, Egea said.

“Even New York has enjoyed job growth — up 0.5 percent, and significantly higher in New York City with more to come courtesy of Amazon — over this same time period, so it cannot be dismissed as preferable weather conditions,” she said.

Egea put it another way.

“This is yet another piece of evidence of New Jersey’s lagging economy which corroborates many of our anecdotal observations regarding the exodus of jobs and residents to states with stronger value proposition compared to ours,” she said.

All this comes after a tax year Murphy could only dream of.

He got a (watered-down) version of a millionaire’s tax and an increase in the corporate business tax, which soon may be the highest of any state in the country.

And, while he hasn’t gotten the extra revenue he was counting on from legalizing cannabis (expect that in 2019), Murphy did get two Supreme Court gifts in rulings legalizing sports betting and collecting on e-commerce.

Bracken said a new strategy is needed.

“It’s time to make us more affordable and more competitive. More taxes just makes our climb to that much more difficult,” he said. “We can’t afford new taxes.

“Murphy uses the phrase, giving people a fair shake. The best fair shake we can give people is to have a good economy and not be the most heavily taxed state in the country and not be the least competitive businesswise. That’s the best shake we can give anybody.”

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