Longtime readers know ROI-NJ views all rankings with a bit of skepticism, as even data can be called into question. But, since Gov. Phil Murphy’s administration often uses the state’s positive rankings as part of its communications (see the scorecard it produced during the East Asia economic mission), it seems fair to offer up rankings that may not show the state in a favorable light.
It’s up to you to decide their validity.
On Thursday, the New Jersey Business & Industry Association will release its annual Regional Business Climate Analysis — one that rates the seven states in the mid-Atlantic region (New Jersey, plus Connecticut, Delaware, Maryland, Massachusetts, New York and Pennsylvania) on six individual business cost drivers that it feels measure business competitiveness:
- Minimum wage;
- Top income tax rate;
- Top corporate tax rate;
- State sales tax plus average local rate;
- Property tax paid as percentage of personal income;
- Maximum Unemployment Insurance contribution per employee.
The states were then given points.
State ratings in each category are scored from 1 (least competitive) to 7 (most competitive).
New Jersey finished last among the states, recording just 10 points — far below the rest.
New Jersey not only has the highest corporate business tax rate and property tax paid as a percentage of personal income in the region, it ranked second (meaning the second-least competitive) in the remaining four categories.
Maryland and Delaware both tied with a top score of 34. Pennsylvania finished third with 30 points, followed by Massachusetts (24), Connecticut (21) and New York (19).
The report was prepared by Kyle Sullender, the director of economic policy research for the NJBIA.
NJBIA CEO Michele Siekerka, a fierce critic of the state’s business policies — especially the recently proposed Corporate Transit Fee — said the numbers show the state is not creating a strong business climate.
“Over the past year, our policymakers publicly acknowledged that New Jersey is an expensive state to do business and affordability and regional competitiveness were important factors for our economy,” she said. “Sadly, their actions ignore their words and being a national outlier appears irrelevant to them when it comes to competitiveness.
“What our policymakers also miss is the fact our businesses rely on their word and actions when considering making investments. While the tax hike alone is bad enough, the way we are getting there, through broken promises and lack of notice, sends a clear message that our job creators don’t matter.
“Beyond the numbers showing New Jersey as an outlier of cost drivers for business, we appear to have a mindset that it’s OK to make it worse. It’s a sad time for New Jersey’s business community when the negative attitude toward our top employers falls in line with our negative numbers. We must do better for business.”
Sullender said the tax numbers are key.
“New Jersey businesses are in a tax rut — and it doesn’t appear there are any mechanisms to drive them out of it,” he said.
“A $1 billion-plus UI tax increase on employers after the pandemic, which could have been mitigated with federal COVID relief dollars, has greatly increased what employers pay every week for every employee.
“With the proposal of a new and permanent 2.5% corporate income surtax, it appears New Jersey will remain a regional and national outlier for business cost drivers.”
