Category: Blog

Latest Health Bill Would Deeply Cut Funding for New Jersey

Posted on by Raymond Castro

A new ACA repeal bill would cut New Jersey’s annual federal funding for health coverage by $4.7 billion by 2026, according to a new report by the Washington DC based Center on Budget and Policy Priorities. The Garden State would be among the hardest hit states under the plan, with a cut of 53 percent to federal funding for health coverage in 2026, compared to current law.

Congressional Republicans’ efforts to repeal the Affordable Care Act (ACA) have failed in recent months in large part because a large majority of Americans oppose taking coverage from millions of people, raising costs for millions more, gutting Medicaid and undermining consumer protections.

This has opened the door to a better path: a transparent, bipartisan effort to strengthen our health care system without taking people’s coverage away or gutting Medicaid. The public supports this approach and bipartisan Senate hearings slated for September offer a first step forward.

Senators Bill Cassidy and Lindsey Graham are reportedly working with the White House to block this emerging, bipartisan option and instead revive the ACA repeal effort by pushing their own version of a repeal bill, the Cassidy-Graham proposal.

Despite claims to the contrary, the Cassidy-Graham plan is in many respects worse for New Jersey than  previous, failed GOP repeal bills, which were already a disaster for the state.

For example, New Jersey sees a deeper cut in federal funding for the Medicaid expansion and the ACA marketplace subsidies through 2026, simply because it has the highest population density and third highest per-capita income among all states – but, of course, it also has one of the highest costs of living. The state would also be punished because it has one of the most successful Medicaid expansions in the nation.

The plan would eliminate the ACA Medicaid expansion, which covers 546,000 New Jerseyans, starting in 2027. It would also eliminate tax credits that help 265,000 moderate-income residents afford marketplace coverage and subsidies that help low-income New Jerseyans with out-of-pocket health costs like copays.

A far smaller block grant would replace both Medicaid expansion funding and marketplace subsidies. The plan would also cap and deeply cut the rest of the Medicaid program just like previous Senate and House repeal bills. And, after 2026, the block grant would disappear entirely, leaving Garden State residents high and dry.

The public and groups representing patients, hospitals, physicians, seniors, people with disabilities and others have forcefully rejected this misguided approach. It’s time to focus on bipartisan solutions that strengthen – rather than weaken – our health care system.

New Jersey’s Investment in Higher Ed Still Falling Short

Posted on by Brandon McKoy

It has been nearly a decade since the Great Recession hit, yet New Jersey’s spending on higher education remains well below pre-recession levels. While the Garden State likes to tout the fact that we have a high-quality education system that produces some of the best and strongest students and workers nationwide, it is becoming increasingly difficult for the average New Jerseyan to afford the cost of education.

From 2008 to 2017, New Jersey’s investment in higher education fell by $2,113 – or 21.3 percent – per student after adjusting for inflation, according to a new report by the D.C.-based Center on Budget and Policy Priorities. While we are not alone – 44 states spent less per student in 2017 than in 2008 – the cuts here have been deeper than average. 

As the state has pulled back on its investment in higher education, tuition has increased. Since 2008, the average tuition among New Jersey’s public, four-year colleges has increased $2,015 – or 17.5 percent – making it more difficult for low- and middle-income New Jerseyans to afford a college education. High tuition rates lead to more students graduating with dangerously high levels of debt, limiting their ability to move out on their own and start independent lives. In 2004, 57 percent of graduates from public, four-year institutions in New Jersey held debt, and the average amount of debt was $14,539. Ten years later in 2014, 69 percent of students held debt and the average amount was $28,345.

After years of decline, New Jersey finally reversed the trend in 2017 by spending $23 more on higher education per student than the previous year. This bump of 0.29 percent isn’t a significant increase whatsoever, but is better than the alternative of continuing to divest from this important area.

Recent reports from NJPP have shown the severity of this problem. When looking at the average of combined in-state tuition and fees among four-year public institutions, the state ranks 4th highest nationally. And New Jersey is number one nationwide for the share of millennials – 47 percent – who live in their parents’ home.

Ensuring that pursuing higher education and securing a college degree isn’t a guaranteed sentence to economic hardship is one of the most important things New Jersey lawmakers need to address. We all know that our state’s economic future is tied to our high-quality public colleges and universities. But those colleges and universities must be more affordable for striving students and their families – and lawmakers need to be doing more to make college more affordable and more accessible.

Jackie Cornell Named NJPP Director of Development & External Affairs

Posted on by NJPP Staff

New Jersey Policy Perspective (NJPP) announced today that it has hired Jackie Cornell as the organization’s new Director of Development & External Affairs. In her new role on NJPP’s leadership team, Cornell will direct NJPP’s fundraising and outreach efforts.

Cornell brings a long track record of leadership in New Jersey’s progressive community. She was appointed by President Barack Obama as the regional director of the U.S. Department of Health and Human Services; has served as Congressman Rush Holt’s political director and outreach director; founded and led New Leaders Council – New Jersey; and has held crucial positions with Obama for America, Organizing for America, New Jersey Citizen Action and Planned Parenthood. She comes to NJPP from the New Jersey Hospital Association, where she worked as the senior director of Federal Relations and Regulatory Affairs.

She joins NJPP at a crucial juncture in the organization’s history. As it celebrates its 20th anniversary, the respected “think and do tank” is not only playing a significant role in framing key issues in New Jersey’s gubernatorial and legislative elections but is advancing a proactive economic agenda despite chaos in Washington. NJPP has positioned itself to demonstrate both offense in Trenton and defense in D.C. at a pivotal time for economic justice and healthcare.  

“We are blessed to have someone of Jackie’s experience, energy, intelligence, poise and clarity of expression join our team at this critical time,” said NJPP President Gordon MacInnes. “We look forward to having her help ensure that NJPP can continue to play an essential role in framing and advocating for New Jersey’s progressive agenda ”

In addition to her professional experience, Cornell has served on NJPP’s Board of Trustees for about three years (before and after her time at the Department of Health and Human Services). She has resigned her Board seat to join NJPP’s leadership team.

“I am delighted to join NJPP during such an unique time. For much of my career I have relied on the thoughtful and informed analysis of NJPP and it is rewarding to bring my network and expertise to the organization,” said Cornell. “Now more than ever, we need sound research shaping the policies that will strengthen New Jersey.”  

Cornell begins her tenure at NJPP on August 14. She can be reached at jackie (at) njpp.org.

McKinsey Confirms: New Jersey Overspends on Tax Subsidies

Posted on by Jon Whiten

Earlier this month, McKinsey & Company released a new report on how to “reseed” New Jersey’s economic growth moving forward. Among other things, it confirms that state policy governing tax subsidies for corporations has gone off the rails.

Taking a look at the chart above, it’s easy to see that New Jersey has become a big-time outlier when it comes to the extravagance of its tax break programs. The deals have gotten larger while corporations receive much richer subsidies for doing less than elsewhere: New Jersey’s average break per newly-created job is 2.3 times higher than across the country, and 20.3 times higher than it is in Virginia. Meanwhile, the average break per job kept in the state is 3.8 times higher in New Jersey than across the country, and 13.1 times higher than it is in Virginia.

While McKinsey’s findings track NJPP’s own analyses, the firm falls short when it comes to fully assessing why New Jersey has become such an outlier. It suggests that the state’s “returns on incentive deals are likely skewed by the large proportion that are done with older firms, which generate lower returns than investments in fast-growing young companies.” While this may not be incorrect, it is certainly incomplete.

In fact, New Jersey policymakers are to blame for the current situation and the out-of-control subsidy programs. Their almost exclusive economic response to the ravages of the Great Recession was to enact  several new lucrative tax break programs. And then they doubled down on these subsidies in a major way with the “Economic Opportunity Act” of 2013, which lifted nearly all financial  controls and ceilings, loosened job-creation and investment standards, and  led to an explosion in subsidies awarded, costs per job and long-term reductions in budgetary revenues. 

McKinsey does rightly note that New Jersey lacks consistent and rigorous oversight of its subsidy programs, and that more accountability would help improve the “investment returns” of these deals. Unfortunately, every attempt to improve in this area in recent years has been vetoed by the governor. What’s more, more reporting and transparency alone will not fix this problem. New Jersey needs to rein in the excesses, revise the programs and impose more financial control; for some concrete ways in which to do so, our May report is a good place to start.

Lawmakers Should Block Governor’s Health Transfer Plan

Posted on by Raymond Castro

Below are prepared remarks to be delivered in front of a joint meeting of the Senate Health, Human Services & Senior Citizens and Assembly Human Services Committees today.

Thank you for the opportunity to testify on the governor’s proposed reorganization plan to transfer mental health and addiction functions from the Department of Human Services to the Department of Health. This is not a minor administrative issue; rather it represents one of the most radical changes ever in the organization of state departments in a century and deserves much more study than the allotted 60 days allow. While we appreciate the governor’s admission that there is a stunning lack of coordination and integration of services within his administration, this plan does not sufficiently support the conclusion that the solution is to put all of these services in one department.

We are also very concerned that even though these problems have been going on for many years, the governor chose to wait until the very end of his administration to rush through these changes, all of which would have to be carried out by the next governor. Gubernatorial transitions are already complicated enough; adding a significant change like this – which could have life or death consequences for New Jersey residents – would make it even more so.

To some extent, this issue is déjà vu all over again. It was only six years ago that the state formally transferred addiction services from the DOH to the DHS to “provide increased efficiency, coordination and integration of the State’s addiction prevention and treatment functions.” Rather than continue to bounce state services back and forth between departments, we need to recognize that there may be other factors that are much more important in improving the efficiency and effectiveness of these services.

One of the main reasons that the DHS was created in 1919 was too oversee psychiatric care. Ever since then, psychiatric hospitals and community mental health services have always been within the department. What we know from this extensive experience is that managing inpatient and community mental health services is very complex, and if it is not done properly it can have disastrous consequences for the consumer’s mental health, including death.

We are also concerned that the state could lose federal Medicaid funding if these services are transferred to the DOH, since Medicaid is administered by DHS. The state has been particularly successful in funding more of these services thanks to the Medicaid expansion, which increased the number of New Jerseyans enrolled in Medicaid by about a half million residents. Also, the department is in the middle of a major transition to fee-for-service funding for mental health and drug addiction services to also maximize Medicaid funds. There have been major problems in administering this transition, which need to be remedied before other major structural changes are implemented.

The governor says there needs to be more integration between mental health and physical health. We strongly agree, but the DHS is the largest provider of physical health in the state through Medicaid so why transfer behavioral health services to the DOH? It would appear that problem could more easily rectified by only relocating all licensing to the DOH rather than transferring all services to the department.

We are also extremely concerned that adding such a major new function to the DOH will divert it from its core mission as a regulatory and planning agency which oversees health in New Jersey. We believe that function is critical and will be especially needed in the future given the many changes that are going on in the health sector, such as consolidation of hospitals, the increase in for-profit hospitals, the growth in tiered network and value-based health services and the need for more accountability throughout the health care system to improve care and reduce costs. We are concerned that these critical functions will be reduced, rather than strengthened, as a result of adding an entirely new function to the DOH. Also, how can the department fairly evaluate the extent to which the state is meeting its health goals if the department itself becomes a major provider of health services?

We also disagree with the governor’s suggestion that since the DHS has a lot of staff and the Department of Health does not, there should be more of a balance. It should be pointed out that while the department does have about 11,000 staff now, that’s about half what it used to have when the department also included children services and corrections. In addition, most research in organizational theory shows that the size of an organization has very little to do with it its efficiency and effectiveness.

Lastly, such a major change in state government should not be made in the face of such uncertainty at the federal level. As we all know, there is a major effort to greatly reduce the amount of federal support the states receive to fund health care. The focus currently is on repealing the Affordable Care Act, but it’s also clear that Congress is very interested in many other health care cutbacks, including about $2 trillion in cuts to health funding over 10 years in the House’s proposed budget. Until we know what those changes are going to be, it would be premature to make major organizational changes in state government. For example, it appears quite likely that there’ll be a major reduction in federal funds to hospitals, in which case the DOH will have more than its hands full.

In conclusion, we believe the governor’s plan could create many more problems than it solves -if it solves any. On the other hand, we recognize that there may be some merit to transferring these services that we have not identified.

We therefore urge that you vote to oppose the governor’s plan and direct him to provide a thorough study, with public hearings and stakeholder input, of the advantages and disadvantages of transferring these services to the DOH from the DHS, taking into account what the mission of the departments should be in the future given the many changes that will likely be made in Washington and the health field in general, and recommending any organizational and statutory changes that may be needed.

We also recommend that the report evaluate the extent to which the governor’s office has the authority to better coordinate these services in lieu of transferring them from one department to another in anticipation that the next governor will decide to take more of a leadership role in managing state services, promoting transparency and encouraging public input.

Gov. Christie Guts Family Leave Bill in Conditional Veto

Posted on by Jon Whiten

Today Gov. Christie gutted a landmark bill improving New Jersey’s paid family leave program (A-4927), taking out every single important policy change and leaving behind modest mandates to improve the state’s processing of paid leave claims and the public reporting about those claims. And in an ironic twist, the governor removed some of the dollars ($3 million, to be exact) needed to make such improvements in his budget veto a few weeks ago.

The legislation (A-4927) closely followed several key recommendations laid out by New Jersey Policy Perspective in an April report.

Gov. Christie’s gutting of these paid leave improvements is a slap in the face to New Jersey’s working families. New Jersey can – and must – do better for its working caregivers, so we can build a strong workforce and a strong economy.

The governor’s veto message focuses only on the modest costs associated with these fixes, and completely ignores the enormous benefits – both the workers and to businesses.

New Jersey was a trailblazer in adopting paid family leave in 2008. And while the program – which is funded entirely by workers at no cost to businesses – has helped many families, with an average of 31,000 New Jerseyans having used paid family leave to either bond with a new child or care for an ill relative each year since its inception, this equals very few people who may be eligible.

  • In fact, NJPP’s estimate is that only 12 percent of eligible new parents are using New Jersey’s Family Leave Insurance. This is lower than in California (17 percent) and Rhode Island (13 percent).
  • What’s more, in New Jersey the usage rate has also remained close to flat since family leave’s introduction – whereas in other states it climbs each year. California’s most recent annual usage rate was, in fact, 20 percent.

There are a few main reasons for this, and chief among them is the state’s woefully inadequate wage replacement of two-thirds of weekly wages. For low-income working families, who already struggle to get by in high-cost New Jersey, losing one-third of your take home pay is often out of the question.

Consider a low-paid worker making $600 a week, or about $15 an hour if they are working 40 hours a week. On leave, the two-thirds replacement rate would provide that worker just $400 a week, the equivalent to $10 an hour – a decrease that an already-struggling family could ill afford.

Meanwhile, an artificially low cap on wage replacements of $633 a week means that middle-class workers are faced with the prospect of losing more than a third of their wages, an unrealistic proposition for the many middle-class families who essentially live paycheck to paycheck in our state.

NJPP has proposed that the wage replacement rate be increased to 100 percent for low-wage workers and 90 percent for higher-paid workers. This bill would have taken a very positive step in the right direction by increasing the rate to 90 percent for all workers.

In addition, NJPP has proposed that the cap on wages by lifted from 53 percent of the preceding two-year statewide average weekly wage (reminder: this year it is $633) to 90 percent (which would bring it to $1,076 this year). This bill would have gotten about halfway there, lifting the wage cap to 78 percent (which would bring it to $932 this year). This  would have been a dramatic improvement over the status quo.

The other big thing keeping eligible New Jersey workers from using paid leave is a lack of job protection. About 1 in 3 New Jersey workers – the 1 million or so who work at businesses with less than 50 employees – are forced to consider taking leave without the peace of mind of knowing their job will be there for them when they get back. So expanding job protection to all New Jersey workers is vitally important.

This bill would have extended job protections to more workers, but left out nearly 700,000 workers – 666,000 workers, or 19 percent of the state’s workforce – by cutting off these protections at firms with 20 or more workers.

Despite opposition from the organized business lobby, paid family leave in New Jersey has been shown to be a boon for businesses, particularly small businesses, who – because of the leave law – can now compete with larger, richer corporations when it comes to certain elements of their benefits packages.

Nearly every survey – even those done by the business lobby groups – has found an overwhelming majority of New Jersey businesses have not seen a negative impact on profitability or productivity from the paid family leave law. Despite Gov. Christie’s rhetoric, there’s no reason to expect this would have changed under these improvements.

Trump Tax Plan: A Boon for the Wealthiest New Jerseyans

Posted on by Jon Whiten

More than half of the tax cut dollars would go to top 1% of taxpayers, who’d get an average break of $130,000

A federal tax package based on President Trump’s April outline would fail to deliver on its promise of mostly helping the middle class, instead showering most of its help to the richest 1 percent, according to a new 50-state analysis from the Institute on Taxation and Economic Policy released today.

In New Jersey (click here for the state Fact Sheet):

  • The top 1 percent of the state’s taxpayers – with average incomes of $3.1 million a year – would receive an average tax cut of $130,440, which is more than 250 times larger than the average $510 tax cut the bottom 60 percent of New Jersey taxpayers – with average incomes of $77,800 – would receive.
  • The top 1 percent would receive 55 percent of the tax cut dollars, while the bottom 60 percent would receive just 21 percent.
  • The average tax cut received by the top 1 percent would equal approximately 4.2 percent of their average annual income while cut received by the bottom 60 percent would equal 1.3 percent of their average annual income.

Even worse, these tax cuts for those who need the least help would be incredibly expensive, costing the federal government $4.8 trillion in revenue over the next decade. To pay for these huge tax cuts for the wealthy, Republican leaders in Congress and the President propose deep and devastating cuts to major programs like Medicare, Medicaid, food assistance and others to offset the costs. As a result, low- and middle-income families would likely lose far more as a result than they gain from the small tax cuts President Trump’s plan would provide them.

These tax cuts would benefit New Jersey’s multi-millionaires while inevitably stripping health care, food assistance and more from low- and moderate-income residents and decimating investments in science, technology and job training that are proven to grow the economy.

Let’s get real: that is not ‘tax reform,’ and it’s surely not a blueprint for true economic opportunity and shared prosperity. It’s Robin Hood in reverse, and in New Jersey it would lead to more hardship, wider income and wealth gaps and lackluster economic growth.

Don’t Forget to Fix New Jersey’s Shrinking Rainy Day Fund

Posted on by Sheila Reynertson

The tumultuous passage of New Jersey’s 2018 budget may be over, but the horse-trading and the shutdown drama doesn’t hide the simple fact that New Jersey is in serious financial trouble. Big tax cuts and a lackluster economy continue to put a damper on the state’s ability to meet its needs – and save for unexpected ones. Last year New Jersey had to dip into its reserves just to pay its bills, ending the budget cycle with $80 million less in its nearly empty savings account. That doesn’t bode well as a long-term strategy, nor does it signal to credit agencies that the state is on solid footing.

As it stands now, New Jersey is slated to close out the current budget with just $493 million in savings on June 30, 2018. That represents approximately 1.4 percent of the state’s budget, or 5 days of government operation.

That’s about in line with what was recently projected by the credit-rating agency Moody’s, which estimated that the surplus will actually drop to 1.3 percent of operating revenues in the 2018 fiscal year. These reserves have remained at dangerously low levels in the state since they bottomed out at the end of the Great Recession. This pattern is a reflection of a state economy still struggling to bounce back; but it is also a reflection of poor governance grown accustomed to relying on these reserves to cover chronic budget shortfalls.

As of the end of June 2016, New Jersey had a total balance of just $551 million, or 1.6 percent of state spending. This was enough to operate the state for just six days. That ranked 5th lowest in the nation, and far behind the 50-state average of reserves that represented 9.6 percent of spending and kept the government running for 35 days, according to an analysis by the Pew Charitable Trusts.

This is a far cry from New Jersey’s reserves back in 2007 when the state had 31.2 days worth of general funds to operate on. That represented 8.5 percent of state spending at the time. Since 2009, New Jersey has put in on average less than 2 percent of annual spending into the surplus account (1.85 percent).

Rebuilding the reserves to this 2007 level would put New Jersey in line with today’s national median (34.9 days or 9.6 percent of spending). To ensure minimal disruption, this should be done over 5 years, putting 0.2 percent more – or an additional $100 million – into reserves each year, to slowly rebuild New Jersey’s financial cushion. The main point here is that New Jersey should be adding to the reserves each year, not subtracting from them. And, as we noted above, New Jersey’s reserves have only gotten smaller since this Pew analysis, shrinking by 12.5 percent between June 2016 and what is projected for June 2018.

A healthy surplus puts New Jersey in a much better position to weather a year of economic downturn or another super storm but it’s only viable as an option if the state’s finances are stabilized enough – and the state’s leadership is willing enough – to build it. Credit rating agencies are likely to take notice, too, leading to potential upgrades.

After a record 11 credit downgrades during Gov. Christie’s tenure, policies that can responsibly put our financial house back in order – which often come with credit rating boosts – are desperately needed and can help relieve some budget pressures. A state’s credit rating directly influences New Jersey’s cost of repaying bonds sold to investors to finance major capital projects like the construction and renovation of roads, schools and parks. The lower the rating, the more it costs taxpayers to pay off debts, siphoning away dollars the state needs to make ends meet.

Yes, New Jersey has a long list of other urgent needs that must take greater priority. But taking the initiative to also rebuild the reserves sends a message that New Jersey has its eye on the future by planning ahead for lean times. Ignoring this financial responsibility only puts New Jersey in greater trouble down the road. We just can’t afford to take that route.

Latest Trumpcare Bill: Like Deja Vu All Over Again

Posted on by Raymond Castro

The latest Senate health bill that was released today is just as bad for New Jersey as the previous iterations, and would cause widespread loss of health care and increase suffering across the state.

Even though national polls show that nine in ten Americans oppose Medicaid cuts, the Republicans in D.C. seem hell-bent on destroying Medicaid and effectively ending the Medicaid expansion, which would harm New Jersey more than other states.

In fact, the bill still ends the current federal funding level for the Medicaid expansion in 2021. This would likely result in about 560,000 New Jerseyans – or 10 percent of all non-elderly adults – losing their health coverage, the loss of up to $4 billion in federal funds each year and the elimination of tens of thousands of jobs.

In addition, it continues to cap and reduce funding for the entire Medicaid program by about $60 billion over 20 years in New Jersey. This radical proposal has nothing to do with improving the Affordable Care Act, but everything to do with a long-standing right-wing ideological attempt to gut Medicaid. This change would eventually result in massive health care cuts to the 1.6 million New Jerseyans who are covered through Medicaid, including hundreds of thousands of Garden State kids. New Jersey’s seniors and people with disabilities – who make up about two-thirds of all Medicaid funding – would be hit the hardest.

This bill would cause deeper harm in New Jersey than other states because the state has the eighth largest enrollment in the Medicaid expansion, and because the federal Medicaid matching rate in New Jersey would be reduced the lowest level possible: 50 percent.

While the new bill does increase premium subsidies in the health insurance marketplace as compared to earlier versions, most New Jerseyans would still receive less in subsidies than under current law. What’s more, any positive impact from premium subsidies would pale compared to the Medicaid cuts, because there are eight times as many people in Medicaid than there are receiving subsidies in New Jersey.

Setting the Record Straight on New Jersey ‘Outmigration’

Posted on by Sheila Reynertson

“The only way to stem our tide of outmigration is to bring our economic policies in line with our direct regional competitors — Pennsylvania and New York.”

And so the latest wolf cry from business lobbyists about New Jersey’s supposed crisis of “outmigration” begins. The only problem: there is no “tide of outmigration” to Pennsylvania and New York. In fact, there is a very small ripple in the reverse direction.

On the whole, despite what anti-tax forces would have you believe, New Jersey’s population and total income are growing, not shrinking.

These recycled claims about state income losses and migration patterns are part of a long-term strategy to cut taxes for businesses and New Jersey’s wealthiest households. Not only are they misleading and inaccurate, they are an unnecessary distraction at a time when a clear-eyed and pragmatic approach to New Jersey’s financial and economic crises is needed more than ever.

It is disingenuous to assert that the tax policies of Pennsylvania and New York are challenging the state’s competitiveness and robbing New Jersey of people and dollars. Highlighting only those who leave makes it seem as though New Jersey is the ever-shrinking state – a falsehood that becomes clear when one sensibly includes those who move here.

In other words: context matters. A lot.

While it is true that New York and Pennsylvania continue to be the top two destination states for New Jerseyans moving away, it is also true that they are the top two origin states for people moving to New Jersey.

In fact, more people move to New Jersey from New York than from the other way around. And for every 10 Jerseyans who move to Pennsylvania, 8 Pennsylvanians move to New Jersey. There is nothing new about these patterns, and they are relatively constant through various tax and economic policy changes.

That is the nature of bordering states. People tend to come and go relatively frequently – and there is simply no evidence that New Jersey’s or our neighbors’ tax policies drive their relocation decisions.

It is also incorrect to imply that New Jersey’s state income plummets when people leave the state. In fact, this is a misrepresentation of IRS income data, as we pointed out last year.

Nonetheless, business lobbyist are back at it again – making the grossly misleading claim that New Jersey “lost” over $20 billion in adjusted gross income in the last decade. And once again they are doing so without putting that number into context. Shine a light on the whole $3 trillion enchilada and that “loss” ends up being less than 1 percent (.71 percent) of the state’s total household income generated during that time – a tiny sliver, at best.

But the bigger issue is that the IRS has explicitly cautioned against using adjusted gross income in this way – an inconvenient matter that business lobbyists would rather ignore just as they would rather ignore the fact that state-to-state moving patterns are about more than taxes.

This “exodus” storyline is being promoted as a canary in the coal mine, when, in reality, it is merely a distracting non-issue designed to scare the public and discourage legislators from enacting pragmatic tax policies.

Enough with the scare tactics. It’s time to get serious about rebuilding New Jersey’s prosperity.

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