Topic Category: Tax and Budget

House Budget + Trump Tax Cuts = Raw Deal for NJ

Posted on by Jon Whiten

This op-ed appeared in the August 6, 2017 edition of the Sunday Bergen Record.

After spending the last six months trying to take health coverage away from tens of millions of Americans, President Trump and Speaker Paul Ryan are turning their attention to a lower-profile but equally damaging set of policy changes. The House Republicans’ proposed budget unveiled this month, and the accompanying tax cuts outlined by the President, puts millions of New Jersey families at risk while giving huge breaks to the Garden State’s fortunate few.

Much like it did during the failed efforts to roll back the progress we’ve made on health care, New Jersey’s Congressional delegation has an outsized role to play in stopping this madness. The Republicans who put the people in their districts before political party during the health care fight – Reps. Lance, LoBiondo and Smith – should continue to do so as the battle moves to budget and tax policy. After all, the threat these proposals pose to their constituents’ well-being remains incredibly serious.

Their GOP colleagues who supported Trumpcare – Reps. Frelinghuysen and MacArthur – ought to join them this time, and use their considerable influence in D.C. (Frelinghuysen, in particular, as Appropriations Chairman) to ensure New Jersey gets a fair tax and budget deal, not a raw one.

What’s at stake?

The budget plan could result in devastating cuts to programs that expand economic opportunity for all New Jerseyans, including investments in science, technology, job training and education that are proven to grow the economy, with $1.3 trillion in cuts over a decade in so-called “non-discretionary defense” spending (in other words, any domestic and international spending that isn’t an entitlement program and isn’t the military). Under the House GOP plan, by 2027 this spending would 44 percent lower than it was in 2010, while defense spending would grow by $929 billion between now and then.

But the proposal would fall hardest on Garden State residents struggling in the state’s sluggish economy, with a severe $4.4 trillion cut in entitlement programs over 10 years.

Among the carnage is a $150 billion cut to food assistance through a 20 percent reduction in the Supplemental Nutrition Assistance Program (SNAP). These cruel cuts put the nearly 900,000 New Jerseyans who are helped with affordable groceries through SNAP at risk. In the state’s districts represented by Republicans, approximately 80 percent of families who received SNAP benefits in 2015 had at least one person who worked during that year – and 51 percent had at least one child in the home.

Meanwhile, as Republicans continue their efforts to sabotage health care by repealing of the Affordable Care Act, the proposed budget also puts health care in the crosshairs, with a whopping $2 trillion in cuts to Medicaid and Medicare over a decade.

The Medicaid cuts alone come in at around $1.5 trillion, a deeper cut than anything that’s been considered in the ACA repeal bills. The budget incorporates the Medicaid cuts in the House-passed ACA repeal legislation, and then adds additional cuts on top. It still permanently cuts and caps Medicaid funding to states, completely changing the entitlement nature of the program and shifting significant costs to states. Most states – like New Jersey, with its deep budget crisis – will not be able to make up the lost funding, which will then result in cuts to health care, restrictions on eligibility, or some combination.

These cuts put about 1.8 million New Jerseyans – including 852,000 kids – at risk. About half a million constituents in New Jersey districts represented by Republican members of Congress rely on Medicaid for health care – and nearly half of them are children.

To make matters even worse, these deep and damaging cuts to key investments, services and programs are merely a vehicle to deliver massive tax breaks to the wealthiest Americans.

In New Jersey, 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. In fact, the average tax cut for the wealthiest New Jerseyans is more than double the average annual income of the state’s middle-class families.

Overall, New Jersey’s top 1 percent would receive 55 percent of the tax cut dollars, while the bottom 60 percent would receive just 21 percent. But the small tax savings received by New Jersey low- and middle-income families would likely be more than offset by the cuts in services and supports included in the proposed budget. In the end, most New Jersey working families would be much worse off if this plan were adopted.

New Jersey is just now beginning to regain its footing after a long stretch of slower-than-average economic growth. The state’s middle-class is shrinking, the gap between the very rich and the rest of us is growing, and poverty remains a pressing problem. The House GOP budget would set the Garden State back, and our Representatives ought to oppose it.

 

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.

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.

Five Reasons Christie Should OK Paid Leave Fixes

Posted on by Jon Whiten

This op-ed appeared in the July 16, 2017 edition of the Sunday Star-Ledger.

Last month the New Jersey legislature sent Gov. Christie a landmark bill to boost working caregivers, small businesses and the state’s economy. The legislation would go a long way to ensuring that more workers – who all pay into the funding for paid family leave – are able to take advantage of this vital benefit. After all, while an average of 31,000 New Jerseyans have used paid leave each year since its inception – an impressive number – that’s just a small share of those who are eligible.

There are many clear and compelling reasons the governor should sign these improvements into law. Here are five.

It would help low-paid workers

Today if you take paid leave in New Jersey, you receive a wage replacement that equals two-thirds of your weekly wage. But for low-income working families scraping by in high-cost New Jersey, losing one-third of a week’s take-home pay is often out of the question.

Consider a 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. Under this bill, that worker’s take-home pay would increase to $540 a week; while he or she would still be losing income, the loss would be much smaller.

It would help middle-class workers

Meanwhile, an artificially low cap on wage replacement 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.

Consider a worker making $1,200 a week, which is slightly above the statewide average. Today, that worker would lose nearly half of his or her income by taking leave, because the cap on wages is set at 53 percent of the statewide average weekly wage. This bill takes a step in the right direction by increasing the cap to 78 percent, which would get the $1,200-a-week worker up to $936, but it would still fall short of what’s required for middle-class workers taking leave.

It would help small businesses compete

While paid leave – and its expansion – have been characterized by lobbyists as being “bad for small businesses,” in fact the opposite is true. Retaining a strong and talented workforce remains the primary concern of most small businesses, and having a state family leave program helps ensure that small firms and mom-and-pop shops can better compete with multinational corporations when it comes to leave benefits.

Perhaps that’s why most small businesses in New Jersey have had no trouble adjusting to the paid leave law, and have found it to either have no effect or a positive effect on their bottom line. After all, this is a robust social insurance program, paid for entirely by workers, that helps businesses attract and retain talent.

It would help many workers at those small businesses

Another big thing keeping eligible New Jersey workers from using paid leave is a lack of job protection. Currently 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.

This bill extends job protections to some of those workers by covering those who work at firms with 20 or more workers, which is a positive step. That said, by not making these protections universal the bill leaves out 19 percent of the state’s workforce – the nearly 700,000 workers that work at businesses with fewer than 20 employees.

The costs are tiny compared to the benefits

Workers – not employers – pay for the entire paid leave program through a payroll tax. This year, workers contribute 0.10 percent of their salary up to the first $33,500 they earn. The most anyone can pay in is $33.50 a year – or about 60 cents a week.

By slightly increasing the wage ceiling and the amount of the payroll tax, New Jersey could easily raise enough revenue to accommodate a projected increase in usage – and the benefit would still be a bargain for workers.

For example, if paid leave usage soared, we estimate that the cost to workers could rise to a maximum of $2.45 a week. Even with these higher contributions, New Jersey workers would still be paying far less than workers in other states with paid leave.

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.

Governor’s Modest Budget Vetoes Fall on Most Vulnerable

Posted on by Jon Whiten

While the three-day shutdown, the Horizon bill and “Beachgate” have dominated attention as this year’s budget season came to a dramatic close, there are several modest but important line-item vetoes Gov. Christie made to the final budget that fall on the most vulnerable in the state.

The governor agreed to most of the legislature’s changes to his spending plan, but aimed his red veto pen squarely at some of New Jersey’s most vulnerable residents. It’s a fitting final fiscal act from a governor who through eight budgets has prioritized tax cuts for the state’s wealthiest families and biggest businesses over helping struggling families climb the ladder into the middle class.

Among other things, Gov. Christie axed:

 

Food assistance for struggling families

The governor vetoed language that would’ve restored so-called “Heat and Eat” benefits that tie important federal nutritional benefits to state heating assistance. In 2014 when the federal government changed rules governing this program, most eligible states changed their rules as well to ensure the continuation of crucial benefits. New Jersey chose not to, and as a result an estimated 160,000 New Jersey households that include seniors, people with disabilities and children have had their Supplemental Nutrition Assistance Program (SNAP) benefits cut by an approximate average of $90 per month.

(Background: https://www.njpp.org/blog/op-ed-four-reasons-new-jersey-should-maintain-its-heat-and-eat-program)

Basic assistance for some of New Jersey’s poorest kids

The governor vetoed language that would’ve repealed the so-called “family cap” for Work First NJ. This cap denies basic assistance to children who, through no fault of their own, are born while their mothers are on Work First NJ (also known as Temporary Assistance to Needy Families). This cap has denied essential assistance to over 20,000 babies since its inception and punishes kids for being born poor.

(Background: https://www.njpp.org/blog/repealing-tanfs-family-cap-makes-moral-and-economic-sense)

Paid leave processing & awareness improvements

The governor vetoed language that would’ve directed the state to spend $2 million from the paid family leave program’s fund to improve the timeliness of paid leave claims processing, and $1 million on education and community outreach.

(Background: https://www.njpp.org/reports/boosting-families-boosting-the-economy-how-to-improve-new-jerseys-paid-family-leave-program)

Passing the 2018 Budget Must Come First

Posted on by Jon Whiten

This is Trenton horse trading and gimmicky budgeting at its worst, because the budget itself doesn’t have anything to do with the Horizon bill when it comes to policy – it’s only being attached because of political wheeling and dealing.

The state budget is about far more than numbers, and it is certainly about much more than political gamesmanship – it is about meeting the needs of all of New Jersey’s residents. The focus today needs to be on passing the 2018 budget – not about trying to put together another Frankendeal just to fulfill the governor’s crusade against Horizon.

Lottery/Pensions Deal is a Reckless Budget Gimmick

Posted on by Gordon MacInnes

This op-ed appeared in the June 23, 2017 edition of NJ Spotlight.

Gov. Christie is pushing hard on the legislature to approve his bait-and-switch proposal to use the Lottery’s profits for paying off pensions. There’s a problem with this idea that has received little attention yet from the administration or legislature: where will New Jersey find the shifted $1 billion to help finance education and institutions?

It’s no wonder that Treasurer Scudder is so anxious to see the Lottery switch deal enacted by June 30. Since the governor’s 2018 budget proposal includes $2.5 billion for pension payments, that number could be reduced by the $1 billion in Lottery profits and could be used to finance the $1 billion in educational and institutions now paid by the Lottery. Well at least for one year. And Gov. Christie appears to have gained the cooperation of at least the Senate’s leadership who have put the bill to dedicate the Lottery profits to the pension payments on a greased rail.

Here’s the probable reason for the rush: only if the Lottery switch occurs before July 1 can its proponents claim that the services and programs now supported by the Lottery’s profits will not be negatively affected by the switch. Yes, for one year Tuition Aid Grants and support for disabled veterans can be sustained without cutting other programs or increasing taxes. After that, the jig’s up and disabled vets and striving students can join the long list of essential services that have seen state support suffer because New Jersey is simply running out of money (an indisputable fact that no leaders want to acknowledge).

The result: the next governor’s first budget will be at least $800 million shy of the funding needed to support public colleges, tuition aid, services for the severely disabled or the Katzenbach School for the Deaf.

Here’s what’s worse about the Lottery switch: it mirrors many similar steps taken by previous governors and legislatures (abetted by the state Supreme Court) that took New Jersey from the most highly credit-rated state to 50th on the list. Yes, sneaky actions without essential public analyses and time for sharp questioning are responsible for the two-decade downward slide in New Jersey’s capacity to invest in the assets that made it one of the nation’s wealthiest, most economically vibrant states.

Actually, one need not dig into the distant past to find examples of irresponsible financial practices that have eviscerated New Jersey’s financial and economic conditions. Just last month, Gov. Christie orchestrated a whiz-bang evasion of sensible practice and the state’s Constitution by convening the Economic Development Authority board (all of whom he’s appointed) to approve the issuance of $300 million in debt to finance the State House rehabilitation. No legislative approval was sought or given, nevermind putting the question to the public. Not only did the board approve the deal after 4 minutes of discussion, but a package deal was sealed the same day under the watchful eye of Gov. Christie’s former counsel and U.S. Senate appointee, Jeff Chiesa. Thus, when a bipartisan group of legislators filed a petition to block the clearly unconstitutional deal, a Superior Court judge tossed their case out citing the fact that it had already gone through and could not be undone.

The judge apparently accepted the administration’s bizarre argument that the EDA it was not subject to state constitution’s mandate that new debt be subject to public approval unless that debt had a source of constitutionally-dedicated funding to pay it off. The administration insisted the EDA was exempt because, well, it existed as an agency prior to the 2008 adoption of the constitutional amendment that set this mandate in place. This is akin to suggesting that the Tara plantation of “Gone with the Wind” fame could continue enslaving people after the 13th Amendment to the U.S. Constitution was adopted simply because it was in the slave business before its adoption.

In the end, the Lottery switch is just one more scheme that will dig New Jersey’s already deep hole of shrinking support for essential services and investments even deeper. There is hope since at least 21 Senators and 41 members of the Assembly must approve the bill. Given the untrue assertion that the switch is healthy for the state’s financial future, let’s trust that a majority in one chamber or both will have the brains and guts to say “no.”

New Jersey’s Investment in Higher Ed Has Fallen Behind

Posted on by Brandon McKoy

New Jersey likes to tout its reputation for having a high-quality education system that produces some of the strongest students and workers in the country. While it’s certainly true that colleges and universities here consistently rank well nationally, the same can’t be said for our state government’s level of investment in public institutions of higher education.

When taking into account New Jersey’s wealth, our support for higher ed is in the bottom rung of all states. The Garden State ranks 40th nationally (including Washington, D.C.) on the level of tax appropriations per $1,000 in personal income. In other words, despite the high number of wealthy residents and high-income households in New Jersey, the state doesn’t appropriate its tax revenue to support higher education at the level most would expect – especially when compared to our neighbors like New York and Connecticut.

As NJPP showed last year, New Jersey has seen one of the biggest drops in higher education funding per pupil over the past decade. State support dropped from $1.16 billion inflation-adjusted dollars in 2006 to just $725 million in 2015. Looking at state investment per full-time student, funding has dropped from $11,382 inflation-adjusted dollars for the 2005-2006 school year to just $5,744 in the 2013-2014 school year. As a result, tuition levels have increased dramatically in a short amount of time, shifting the financial responsibility for a college education away from the state and onto the backs of working-class families who already have a difficult time making ends meet.

The consequences of high tuition rates have been more students graduating with arrestingly high levels of debt, impeding their ability to move out on their own and start lives independent of their parents. In the 2003-2004 school year, fifty-seven percent of graduates from public 4-year institutions in New Jersey held debt, and the average debt load was $14,539. Just a decade later, in the 2013-2014 school year, those numbers were sixty-nine percent and $28,345, respectively.

In fact, New Jersey is tops in the country for the share of millennials – nearly half – who live in their parents’ home. It goes without saying that having the younger generation saddled with high levels of debt so early in life endangers the future of the state. New Jersey’s system of higher education requires the vast majority of students to borrow so much money that they are far less likely to contribute to the economy because they lack the economic security to start a business, buy a home or a car, and start a family.

With the average of combined in-state tuition and fees among four-year public institutions in New Jersey ranking 4th highest nationally, this is a pressing issue that requires the immediate and sustained attention of lawmakers. Advocates and business leaders all agree that making college more affordable is essential to ensuring that New Jersey retains an educated and innovative workforce – failing to do so will have grave complications for our economy and our future.

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