Tax and Budget Archives - Page 27 of 37 - New Jersey Policy Perspective

In Opioid Crusade, Christie Aims at Wrong Target

Posted on May 22, 2017October 10, 2020 by Gordon MacInnes

This op-ed appeared in the May 22 2017 edition of the Philadelphia Inquirer.

If you’ve been out of touch this past year, you probably won’t guess the obsession of New Jersey’s governor. No, it’s not the state’s steady decline in its credit rating that will cost it hundreds of millions in extra dollars down the road. Nor is it the deterioration in New Jersey’s public transit network that threatens the state’s greatest economic asset of location, location, location. Property taxes still a drain for most families? Not on the governor’s agenda. In the bottom ten of states for job and income growth? Not even acknowledged.

Instead, Gov. Christie has focused almost exclusively on opioid addiction. A majority of the governor’s recent press releases, and about 80 percent of this year’s State of the State, have focused on this issue. His public schedule is dominated by the governor’s sermons to mobilize attention to the problem and praise those already in the battle.

Elevating public concern about a growing public health problem is understandable; the mystery is the governor’s choice for financing this expensive effort.

At the heart of the governor’s crusade, which he hopes to take nation-wide, is his push to force New Jersey’s only nonprofit insurance company to pony up $300 million a year to help out. Gov. Christie’s singular and first-time ever focus on Horizon Blue Cross Blue Shield as the principal revenue source for attacking this problem is accompanied by an effort to stack its board with four more politically-selected directors and to order the banking and insurance department to undertake a special audit.

What deepens the mystery is that the governor’s has made no effort to preserve the largest source of funding to assist opioid addicts: Medicaid.

Medicaid pays for a wide array of “behavioral” treatments, from prescriptions to cut the urge to group sessions with professionals to support withdrawal. Medicaid expansion, which the governor was smart to accept for New Jersey, has extended coverage to 560,000 Garden Staters, including many who are struggling with addiction. And, the federal government now picks up 94 percent of those costs instead of the 50 percent it covers for other Medicaid programs. In this year’s state budget, Medicaid funding is the largest item – even greater than school aid – at $8.7 billion.

Despite this organic connection of the growing opioid problem and Medicaid financing, Gov. Christie has stood on the sidelines as the battle over Medicaid’s future rages in Washington. He accepted the chair of President Trump’s task force on the opioid problem, but is silent on protecting the primary source of funds to assist addicts. He sat out the public debate on the first iteration of Trumpcare, which set the course for a steady decline in overall Medicaid funding and essentially shifted the cost of the expansion from the federal government to the states – to the tune of $8.8 billion for New Jersey over the next decade, a sum that the almost-bankrupt state cannot afford.

Gov. Christie was similarly silent during the debate on Trumpcare II that barely passed on May 4 – put together by New Jersey’s own Congressman Tom MacArthur – which on top of the deep cuts to Medicaid allows states to waive protections for people with pre-existing conditions. Specifically, since insurers could take into account a person’s medical history in setting rates, insurance would be unaffordable for addicts. Worse, they can exclude drug treatment entirely from the mandated policy benefits and, once again, re-impose annual and lifetime limits on payments, which would be catastrophic for opioid addicts. In short, insurance companies would no longer be required to provide affordable coverage for the approximately 20 million drug-addicted Americans.

The day after Trumpcare II passed, the governor finally spoke up for protecting Medicaid, but it’s not like he’s opposed to the House measure. “I want to read it”, he said, to “see if I’m concerned.” Why would a governor seeking to run a national campaign to vanquish opioid addiction be so timid as the largest sources of assistance are threatened with dismantling?

Even if Gov. Christie succeeded in raiding Horizon for $300 million yearly, it would be a flyspeck against the huge defunding of Medicaid and private insurance coverage mandated and financed by Obamacare. If the governor wants to be taken seriously about waging the fight against opioids, he needs to redirect his public ire away from Horizon’s executives and toward the White House and the U.S. Capitol.

It’s Time for New Jersey to Rebalance the Economic-Development Scales

Posted on May 10, 2017October 10, 2020 by Jon Whiten

To read a PDF version of this report, click here.

Because of legislative changes made in 2013, New Jersey’s surge in corporate tax subsidies has risen to unprecedented levels, further cramping New Jersey’s ability to invest in schools, transportation and other areas known to be greater drivers of job creation.

This policy shift comes with an enormous financial reward to very few corporations and an enormous cost to Garden State taxpayers. But it doesn’t have to be this way. In fact, 10 key reforms – from forcing policymakers to actually pay for the tax breaks that happen on their watch to reducing the focus on retaining jobs that are already in New Jersey – could help rebalance the scales and ensure a more responsible approach to economic development in the Garden State.

An Unproven Strategy With Poor Results

Taxes play a minor part in business location decisions, and tax breaks – unlike investments in public assets like transportation or higher education – are not proven to grow a state’s economy.

It’s no mystery why that’s the case, considering that state and local taxes make up less than 5 percent of the cost of doing business.[1] In other words, while most large companies will gladly take a tax break, few will move to a location solely because of it. Other factors – like proximity to markets, a well-educated workforce and safe communities with high-quality schools and access to transportation – are far more important, according to surveys of executives from large corporations.[2]

Yet despite the fact that “economic activity is fairly unresponsive to changes in taxes,” as the Urban Institute notes, tax subsidies’ allure “can be overwhelming because they usually have a higher short-term political return than longer-term policies” and because of the fear of losing a major company to another state.[3] Researchers call this the “ribbon-cutting effect” – the unmistakable desire of political leaders to look like they are working hard to create jobs and grow the economy.

And most small businesses – particularly Main Street firms that form the bedrock of communities across the state – don’t benefit from subsidies at all. In fact, just 15 percent of small business owners have even accessed them, according to one recent survey. Not surprisingly, a third of respondents in that same survey said they have “little knowledge or experience” of or with these tax breaks, another 30 percent said these subsidies do “little for small businesses” and just 17 percent said they were “essential for job creation and economic growth.”[4]

In New Jersey, an increasing reliance on big-dollar tax breaks since 2010 has done little to significantly improve the state’s economy. On nearly every economic metric available, the state remains far behind neighboring states and the nation.

From 2014 to 2015, while an increasingly strong recovery helped American median household incomes grow by more than 5 percent, New Jersey’s household income barely grew at all, with anemic 0.3 percent growth that was the slowest in the nation.[5] When adjusted for inflation, New Jersey’s median household income in 2015 remained 6 percent lower than it was in 2007.[6]

Taking a broader look, more than 7 years after the recession’s official end, New Jersey has just 24,900 more jobs it did before the recession began. As of March 2017, New Jersey had the eighth slowest job growth (0.6 percent) since December 2007. For comparison, the nation as a whole has grown jobs by 5.4 percent during that same time, while the Northeast region – even including New Jersey – has posted growth of 4.6 percent.[7]

These trends have held even as New Jersey’s job growth has experienced a slight uptick: the state’s job growth since January 2010 has been the 11^th slowest in the nation, and its growth since the Economic Opportunity Act went into effect in December 2013 remains in the bottom third of the states (17^th slowest).

But these ineffective tax breaks aren’t just failing to grow the economy and a robust middle class in New Jersey. They are also making it harder to maintain and improve the state’s economy moving forward, by creating a damaging cycle of disinvestment that puts the state’s future at risk. Each dollar of subsidy New Jersey approves is a dollar it stands to lose in the coming years, making it even harder to restore key investments in the very things that corporations put at the top of the list when deciding where to locate their businesses.

Subsidy Programs Have Become Unaffordable

It’s been over three years since New Jersey began approving subsidies under the “Economic Opportunity Act of 2013,” which dramatically expanded these tax break offerings, made them more generous to corporations and removed key financial safeguards, including most ceilings on how much the state can spend on subsidies.

In the 41 months since the state Economic Development Authority (EDA) – which manages these programs – began approving subsidies under the new law, the volume awarded by New Jersey has skyrocketed, exacerbating an already surging reliance on these tax breaks since 2010.

Since December 2013 New Jersey has approved $5.3 billion in tax subsidies, bringing the total since January 2010 to $7.9 billion.[8] That’s more than six times as much as were awarded in the entire previous decade, when the state approved $1.2 billion.

And it’s not just the overall amount of subsidies that has exploded. These tax breaks have become far more lucrative to the corporations receiving them – and far more expensive to taxpayers – with the state giving up more and more tax dollars for each job a subsidy recipient creates or retains.

Post-overhaul, the cost per job is over $83,000, far higher than the $41,600 earlier this decade and more than five times higher than the cost of $16,427 in the 2000s.

And what’s worse, nearly half of these jobs – 45 percent in the “Economic Opportunity Act” era – were already here in New Jersey. This is because the tax breaks focus on retaining jobs that corporations threaten – often idly – to move to other states. The result is that New Jersey taxpayers are often footing the bill for profitable corporations to build new headquarters down the road from their current locations.

This was not always the case in New Jersey. In the 2000s, just 25 percent of these jobs were “retained” jobs; and in the 1996-1999 era, none were.

When one strips out these “retained jobs,” and focuses solely on the jobs that are new to New Jersey, the average taxpayer cost per job skyrockets to $152,119 since December 2013 – about double the cost earlier this decade ($77,054) and about seven times higher than the cost of $21,878 in the 2000s.

This surge in tax subsidies will create a long-term and growing drag on New Jersey’s economy, creating a significant problem that policymakers will have to grapple with for at least the next 15 years as the backlog of tax credits is paid out.

The tax breaks will cost New Jersey about $3.3 billion in fiscal years 2017 through 2021 alone, or an average of $668 million a year, according to Economic Development Authority (EDA) estimates.[9] And this is merely the tip of the iceberg in terms of the true long-term fiscal impact (see the recommendations for the shortcomings of these projections and how to improve them).

For a state that cannot meet its past and current obligations, that’s a dangerous amount of revenue that could be put to much better use by investing in the assets that, unlike tax breaks, are proven to grow New Jersey’s economy, like public colleges and transportation, or providing a stronger safety net for the growing numbers of working New Jersey families and children who are living in poverty.

And the negative impact on New Jersey’s finances is only going to grow after 2021, as more of the corporations who’ve been approved for tax breaks in recent years cash in. This natural lag time is the result of two factors: one, it generally takes a few years for approved projects to start delivering any jobs or capital investment and therefore receive any tax break; and two, most subsidy awards are over 10-year periods, which ensures that the revenue loss comes in smaller bites but lasts for a longer period of time. To wit: Of the $5.6 billion in future tax credits approved after the legislative overhaul, only $40.1 million – or less than 1 percent – has been redeemed to date, according to the EDA.[10]

What’s worse, despite the ballooning costs, only a narrow slice of New Jersey’s business community is granted such assistance – less than 300 of New Jersey’s approximately 200,000 businesses have received subsidies under the Economic Opportunity Act.[11] In other words, about two-tenths of 1 percent of New Jersey’s businesses have benefited from the tax shift that the subsidy programs create while the other 99-plus percent are left to make up for the revenue the state will lose.

Common-Sense Reforms Would Put Help New Jersey Back on Track

New Jersey’s policymakers need to control this surge in subsidies before more damage is done to the state’s economy and before the bills we’re passing on to future taxpayers become even larger. Reining in the use of tax breaks for large corporations would allow lawmakers to focus more on tried-and-true economic-development strategies like workforce development and job training; direct entrpreneurial assistance; and investments in public higher education and early education, or public transit – all of which offer much better return on the state’s investment than tax subsidies.[12]

While the Economic Opportunity Act expires in July 2019, there are immediate actions lawmakers should take to protect New Jersey’s future. One option is to simply move the law’s expiration date up, as a leading Republican lawmaker has proposed. Speaking to a reporter about her proposal to shift the expiration date to July 2017, Assemblywoman Amy Handlin rightly noted that “we need to fundamentally change the way we look at these kinds of initiatives if we’re going to keep some fiscal integrity in the state in future years.”[13]

Short of an early end to the programs, there are plenty of other ways New Jersey lawmakers can start to rebalance the economic-development scales.

Restore Spending Caps

Restoring spending caps on the total amount New Jersey can give in subsidies – not just how much a particular company can receive – would be a great victory for accountability and would increase the legislature’s key role in oversight. Caps – commonly applied before the 2013 overhaul – would prevent subsidy programs from growing beyond a predetermined amount without automatically attracting the attention of lawmakers. Currently, only one of New Jersey’s two subsidy programs has a cap (which has been increased twice through little-noticed bills); the other has no cap at all.

New Jersey should also create an annual cap on the amount of subsidies that can be approved. This helps prevent the program from hitting the overall cap earlier than expected and having it simply increased by legislators before the program expires, as it has in the past. New Jersey’s annual cap should follow the lead of Iowa’s, and be across all major tax subsidy programs administered by the Economic Development Authority.

Annual limits are “one of the strongest protections against surprise increases in tax incentive costs,” according to the Pew Charitable Trusts. Caps can be designed in different ways. In some states, subsidies are awarded on a first-come, first-served basis until a program runs out of money. This is typically how caps have worked in New Jersey. But there are other approaches too. In some states, all businesses seeking breaks apply at the same time, and the state chooses which will receive the subsidies and for how much. And in others, all subsidy-seekers that meet the basic program criteria are approved and receive a break, but the dollar value is prorated depending on how many other companies are approved.[14]

New Jersey should also consider implementing a lower dollars-per-job cap to avoid what’s often called “buffalo hunting” by economic development experts: spending lots of dollars on just a few companies and jobs. Sixteen subsidy programs in states from California to Oklahoma to Maryland impose a dollars-per-job cap of less than $10,000.[15] New Jersey’s current average award per job since December 2013 is close to $84,000 – and in Camden city, the subsidized jobs have a price tag of $276,000 each.

Mandate Better Reporting on Outcomes & Improve Evaluation

New Jersey has improved the information it provides to the public about state subsidies over the past few years, including producing annual reports on tax breaks and other tax expenditures since 2010, but a huge hole remains. The state also needs to honor a mandate to create a Unified Economic Development Budget, which is designed to provide more detailed information from all corporations receiving at least $100,000 in state subsidies, including how many jobs have been created, how much they pay, whether those jobs are full- or part-time and whether they include health coverage. The state Treasury Department has never produced this report, despite being required to do so by legislation passed in 2007.

After claiming for several years that it was in the works and would be forthcoming, Treasury changed course in 2014, telling the Office of Legislative Services that the report would require information that the state can’t share due to “agreements with the Internal Revenue Service respecting the safeguarding and sharing of confidential taxpayer information.”[16]

Legislation passed by the Assembly Budget Committee in October 2016 would make some important tweaks to the 2007 law, and – it appears – would allow Treasury to move forward with the production of this annual report. This bill current awaits a floor vote in the Assembly; it’s companion bill in the Senate is currently awaiting a hearing from the Budget and Appropriations Committee.[17]

Alternatively, the Economic Development Authority – which should have much of the information required by the statutorily-required report – should start producing a similar document each year on its own. Under pressure from advocates and lawmakers, the Authority has taken steps in this direction in the past year – but more robust reporting is still needed.[18]

In addition, New Jersey ought to create and sustain a robust, independent evaluation process to determine if these tax breaks are having the desired effect, or if they are falling short. The Garden State is one of 23 states identified as “trailing” when it comes to evaluating its subsidy programs, according to the Pew Charitable Trusts, which is widely recognized as the nation’s leading authority on evaluating tax breaks.

Despite making “billions of dollars in incentive commitments in recent years,” New Jersey “has not adopted a plan for regular evaluation of tax incentives,” Pew notes. While New Jersey has contracted with the Bloustein School at Rutgers University to undertake an evaluation of the state’s current subsidy offerings, Pew suggests more regular evaluation is required to “answer the questions that are most relevant [to the policy] debate, such as to what extent incentives influence business decisions as opposed to rewarding what companies would have done anyway, and how incentives are affecting net economic activity.”[19]

Last but not least, New Jersey lawmakers ought to require a more regular and longer-term forecasts of the budget impact of already-approved subsidies. Currently, the Economic Development Authority estimates the fiscal impact to the state for the current fiscal year and the next four, as part of the annual budget hearings process. (This forecast is the basis for the $3.3 billion in lost revenue figure cited earlier.)

First, this is a woefully short – and therefore incomplete – forecast, since nearly all approved tax breaks have a 10-year or even 20-year lifespan during which state revenue will be lost and since most projects receiving subsidies take a few years to come online and begin receiving their tax breaks. Second, this is in no way required by law; if the Office of Legislative Services decided to cease asking this question of the EDA, policymakers and the public would no longer get the information.

Lawmakers should require the EDA to provide 15-year forecasts, updated quarterly and posted on the EDA’s website. Alternately, the EDA should take the initiative and do this on its own. We recognize that the more years a forecast goes out, the less reliable the estimate is. But given the design of these tax breaks, the public and other interested parties deserve to know the best estimate of future revenue loss over the long term.

Fix the Net Benefits Test

Policymakers need to follow the lead of the Economic Development Authority and begin restoring some semblance of financial integrity to what’s known as the “net benefits test.” This is the statutory formula the EDA uses to estimate the economic benefits of any proposed tax break, using the number of proposed jobs, their promised wages and other factors. When designed properly, this is a basic taxpayer protection that ensures the state isn’t losing money on a subsidy deal. But in too many cases under the Economic Opportunity Act, the test offers little or no taxpayer protection.

Before 2013, to be approved for a tax break, most tax break projects had to deliver a benefit to the state of at least 110 percent – in other words, 10 percent more than the dollar value of the subsidy – over the same period (usually 15 years) that the company was committed to keeping the jobs in-state. If the corporation didn’t meet those promised obligations, it would receive less of a tax break, or none at all.

But under the Economic Opportunity Act, some projects receiving subsidies in Camden need only deliver a 100 percent benefit – in other words, break even – over 35 years. And the corporation is obligated to deliver the proposed jobs and economic activity for, at most, only 15 years. After that, it can move, slash its workforce, cut pay across the board, or threaten to move in order to receive yet another tax break – and the state would have no recourse to claw back any of the tax credits that had already been claimed. Moreover, think how far off projections made in 1982 about how business would be conducted and where by 2017 – think what besides driverless cars might be around the corner to affect how business everywhere is conducted.

As a result, when taken together, the 26 Grow New Jersey projects approved for Camden so far actually come with a risk to the state of losing $206 million, according to the EDA’s own internal numbers.[20] That stands in stark contrast to the “net benefit” of $777 million that is officially on the books and created by this implausible and unrealistic economic estimating formula.

And Camden isn’t the only area where a corporation could receive an incredibly lopsided benefit. In the four other cities the state considers to be most distressed – Atlantic City, Passaic, Paterson and Trenton – a project’s benefits must equal 110 percent of the tax break but are estimated over 30 years, which still creates a significant imbalance between taxpayer and corporate interests. So, an EDA-approved Atlantic City call center can collect $33 million in tax breaks over a 10 year period, shut its doors and move offshore after 15, with New Jersey taxpayers absorbing a $11 million loss and the state defenseless to do anything about it.

This winter, the EDA took an important step toward reducing risks by changing the rules of this “net benefits test.”[21]

Under the changes, which officially went into effect in April, the net benefits test would eliminate most – but not all – of the estimated economic benefits in the so-called “out years” (ie, the years when there is no guarantee a corporation will still be in New Jersey). And there is a window in which a corporation can ink an agreement with the EDA promising to stay beyond the official commitment period and still receive the larger subsidy. While this is not ideal, we are glad to see the proposed changes also include a clawback provision, by which the state can recoup some of the subsidy it’s already awarded if the corporation breaks a promise to stay beyond the official commitment period.

Tax break applicants will be subject to the new formula starting in July of this year. The change will not apply to the $1.5 billion in subsidized projects already approved in Camden.[22]

The EDA is to be applauded for its actions, but the real reform must come from the legislature and governor, as they write the law that governs these subsidies.

When it comes to this net benefits test, the legislature should follow the EDA’s lead and restore some fiscal responsibility and realism to the test. The easiest and most sensible way to do so would be to ensure that the net benefits test covers only the number of years the corporation is committed by statute to stay in the state, as legislation introduced by Assemblyman Troy Singleton would do.[23]

Eliminate, or Develop More Stringent Standards for, Subsidies for Existing Jobs

The practice of rewarding companies that threaten to leave New Jersey is short-sighted, as is the state’s increasing use of this “strategy.” Ideally, policymakers would eliminate state subsidies to “retain” existing jobs, but if they aren’t willing to take this common-sense step, they should at least develop more stringent standards that would limit subsidies for jobs supposedly at risk of being moved to another state.

One of the few positives of 2013’s subsidy overhaul was that it took a first step in this direction by finally treating retained jobs differently than new jobs. First, these jobs are now only eligible for 50 percent of the gross amount of tax credits that a new job at the same facility would be. Second, the number of jobs that must be retained for a company to be eligible for a subsidy is higher than the number of new jobs required at a firm that is relocating. For example, a company moving here from Connecticut must bring only 10 new jobs to qualify for a subsidy, while a company already here would have to keep 25 existing jobs to be eligible for the same award. (There are, however, loopholes that effectively eliminate any difference between new and existing jobs in certain situations.[24])

In addition, the Economic Development Authority adopted new regulations that would help ensure that professional-service jobs (accountants, attorneys and the like) and their support staff aren’t eligible to be deemed “at-risk” jobs.[25] This makes a lot of sense, because much like your local pizza parlor, accountants and other professionals with local customer bases and expertise about Jersey-centric laws and regulations aren’t going to leave New Jersey in pursuit of lower taxes in other states.

But policymakers should do more. They should build on this progress by placing a cap on the percentage of subsidy dollars that can go to existing jobs. Ideally, this cap would reflect the minimal economic growth created by retaining jobs, as well as the obvious fact that not all threats to leave the state are real – we suggest 10 percent of gross tax credits as a good place to start.

Other Reforms

New Jersey policymakers should also:

Put Subsidies in the State Budget: Approving a lucrative tax credit program for corporations is an easy choice for policymakers when they don’t have to appropriate any money and can point to their efforts as having done something to help the economy (even if that’s not the case). It needs to be a harder choice. Putting all of New Jersey’s subsidy programs into the budget process – even if only by making legislators specify the dollars to be spent on tax credit redemptions each year – would promote a better debate about the best ways to best to foster broad prosperity in New Jersey.

Restrict Corporations’ Ability to Redeem More in Credits Than They Owe in Taxes: New Jersey allows subsidy-receiving corporations to sell their tax credits to an entity that owes the state taxes. This enables the sellers to receive far more money in subsidies than they actually owe in taxes, which is overly generous and violates the spirit behind tax breaks. In New Jersey, businesses were approved to transfer or sell $247 million in tax credits between 2013 and 2016.[26] Some states are considering putting an end to this practice “as a way to keep costs under control,” according to the Pew Charitable Trusts.[27] In New Jersey, even nonprofit corporations – which are exempt from state corporate taxes to begin with – receive subsidies and boost their own revenues by selling those tax credits to taxpaying businesses. This practice should be ended, and soon. Barring corporations from selling excess tax credits is a common-sense step New Jersey policymakers should take to rein in excessive costs.

Ensure Fair Wages: A key positive provision of the Economic Opportunity Act of 2013 bill would have ensured that custodial, security and building maintenance workers on any project or development that received tax credits be paid no less than the prevailing wage for that industry or sector. Unfortunately, this was the only provision of the original legislation that the governor conditionally vetoed, and it never became a reality. As a result, New Jersey is at risk of subsidizing employers who offer unlivable wages related to many of these projects.

Prevent Extra Rewards for Known Federal Tax Dodgers: New Jersey should not allow corporations that take advantage of “inversions” – the tax-avoidance scheme of a larger U.S. corporation merging with a smaller foreign company to avoid U.S. taxes – to also receive state tax breaks. Under current law, the state is at risk of a double whammy: a company’s federal tax avoidance produces a lower state tax base, which is again reduced by generous tax breaks handed out by the Economic Development Authority. While New Jersey policymakers can’t change federal tax policy on inversions, they can take small but important steps to protect New Jersey’s tax base and limit the state’s rewards for bad corporate behavior.

Include Automatic Sunset Provisions:The Economic Opportunity Act rightly includes an automatic expiration – or sunset provision – for both active subsidy programs. This is important because it forces policymakers to reconsider the tax breaks to see if they are meeting their goals, rather than allowing the subsidies to continue without further examination. When considering future subsidy programs, the legislature should be sure to include this provision. Or, better yet, the state could adopt umbrella legislation that would place an automatic sunset on all subsidy programs.

Cooperate With, Rather Than Compete Against, New Jersey’s Neighbors: Instead of operating in a vacuum that ends at New Jersey’s borders, policymakers and leaders should develop a mutually beneficial subsidy policy with our neighboring states rather than competing with them to move jobs back and forth, as their colleagues in the Kansas City area are trying to do.[28] Doing so could allow the entire region to move forward with an economic-development strategy that would benefit all partners, rather than benefiting one state at the expense of another and doing nothing for the region as a whole.

Endnotes

[1] Good Jobs First and the Iowa Policy Project, Selling Snake Oil to the States, November 2012.

[2] See, for example, Area Development magazine’s annual survey of corporate executives. In 2016, “highway accessibility” (ie, location) and “availability of skilled labor” were ranked the top factors for site selection. “State and local tax incentives” and “corporate tax rate” were ranked fifth and sixth, respectively. http://www.areadevelopment.com/Corporate-Consultants-Survey-Results/Q1-2017/highway-accessibility-tops-list-Charles-Ruby-Deloitte-Tax.shtml

[3] Urban Institute, State Economic Development Strategies: A Discussion Framework, April 2017.

[4] Main Street Alliance, Voices of Main Street, October 2015.

[5] NJPP analysis of 2015 US Census Bureau American Community Survey data.

[6] New Jersey Policy Perspective, New Jersey’s Sluggish Recovery Hurting Working Families, September 2016.

[7] New Jersey Policy Perspective and Economic Policy Institute analysis of Bureau of Labor Statistics employment data.

[8] NJPP analysis of New Jersey Economic Development Authority public data, accessed via the EDA website’s “Incentives Activity Reports” in late April 2017. The data is up-to-date through the April 2017 EDA meeting.

[9] New Jersey Economic Development Authority, Response to Office of Legislative Services Questions in Fiscal Year 2018 Budget Hearings, May 2017.

[10] New Jersey Economic Development Authority, Completed and Certified Incentive Projects, April 2017.

[11] New Jersey had 194,184 firms in 2013, the most recent year for which data is available from the U.S. Census Bureau’s Statistics of U.S. Businesses. http://www.census.gov/programs-surveys/susb.html

[12] See W.E. Upjohn Institute for Employment Research, Cost-Effectiveness of Alternative Economic Development Policies (September 2009), Urban Institute, State Economic Development Strategies: A Discussion Framework (April 2017) and Good Jobs First, Smart Skills versus Mindless Megadeals, (September 2016).

[13] Politico New Jersey, GOP Lawmaker Aims to End Economic Incentives She Supported, February 2017.

[14] Pew Charitable Trusts, Reducing Budget Risks, December 2015.

[15] Good Jobs First, Smart Skills versus Mindless Megadeals, September 2016.

[16] New Jersey Office of Legislative Services, Treasury Department Response to Questions, May 2014.

[17] The bills in question are A-301 (http://www.njleg.state.nj.us/2016/Bills/A0500/301_R2.PDF) and S-2744 (http://www.njleg.state.nj.us/2016/Bills/S3000/2744_I1.PDF)

[18] New Jersey Policy Perspective, A Step in the Right Direction: EDA Adds Some Results to its Tax Subsidy Reporting, May 2015.

[19] Pew Charitable Trusts, How States Are Improving Tax Incentives for Jobs and Growth, May 2017.

[20] NJPP analysis of New Jersey Economic Development Authority “net benefits tests” for each Camden deal; obtained via the Open Public Records Act.

[21] New Jersey Register (Volume 49, Issue 8), Rule Adoptions – Economic Development Authority – Adopted Amendments: N.J.A.C. 19:31-18.3 and 18.10, April 2017.

[22] Ibid 9

[23] Assembly Bill Number 328, http://www.njleg.state.nj.us/2016/Bills/A0500/328_R1.PDF

[24] New Jersey Policy Perspective, New Jersey’s Subsidy Overhaul: One Step Forward, Five Steps Back, August 2013.

[25] New Jersey Register (Volume 49, Issue 1), Rule Adoptions – Economic Development Authority – Adopted Amendments: N.J.A.C. 19:31-18.3 Eligibility Criteria, January 2017.

[26] Ibid 9

[27] Ibid 14

[28] New Jersey Policy Perspective, Kansas & Missouri Work Towards Tax Subsidy Ceasefire, August 2016.

Use Auction Proceeds to Keep Public Informed

Posted on May 8, 2017October 10, 2020 by Jon Whiten

This op-ed appeared in the Friday, May 5 2017 edition of the Asbury Park Press.

Across New Jersey, in every community and at every level of government, decisions are made every day that affect the lives of all of us. Yet more often than not, these decisions are made in the dark, with little or no public knowledge and even less public participation as the circulations of daily and weekly newspapers have collapsed.

These burnt-out spotlights threaten our democracy, giving us political leaders who are less accountable, residents who are less engaged and a greatly eroded civic life.

That’s the bad news.

But there’s good news, too: right now New Jersey has a once-in-a-lifetime opportunity to start to replace some of the bulbs in those spotlights, allowing for more informed communities and a more engaged democracy in cities and towns across the state — and to do so in a way that makes sense in a 21st century news and information ecosystem.

Here’s how:

The state will soon receive $332 million from wireless companies that purchased two pieces of the public airwaves owned by New Jersey — $194 million for WNJN in Montclair and $138 million for WNJT in Trenton — in an auction run by the Federal Communications Commission.

Right now the funds are slated to be absorbed into Gov. Christie’s budget for the coming fiscal year that starts July 1, disappearing into a $36 billion budget with little notice and little consequence. But there is a better idea out there, and we are joining with the Free Press Action Fund, universities across the state and other key stakeholders to ask lawmakers to act on it.

After all, dedicating some of the proceeds of this sale to a public good and the original intent of these public airwaves — to better inform New Jersey’s communities — just makes sense. These are public assets being sold off, and they shouldn’t just be used to provide some cover for decades of reckless fiscal policy.

A portion of the proceeds — less than one-third — should instead be used to create and provide seed funding for a New Jersey Civic Information Consortium. The consortium would be an standalone nonprofit with institutional ties to partners at Montclair State University, the New Jersey Institute of Technology, Rowan University and Rutgers University — and it would operate independently, free from undue political influence.

With $100 million in initial funding, the consortium could fund innovative news and civic information projects for years. The seed money would also be essential to allow the consortium to attract other philanthropic investment, helping to build a more sustainable information ecosystem and establishing New Jersey as a national leader in finding new ways to inform its communities and its civic life as the old one-way models of information continue to crumble. (For more on how this would all work, and to get involved, visit newsvoices.org.)

In this way, the consortium would build on the momentum that has already been created here in New Jersey by private foundations, academic institutions, newsroom partners and dozens of enthusiastic civic-information entrepreneurs. Investment in the consortium could help propel these efforts to new heights.

We know there is great need for this kind of investment in information and innovation. After all, New Jersey is one of the most underserved states when it comes to news and information. Sandwiched between the New York City and Philadelphia media markets, information vacuums and news deserts exist all around the state, and on important issues crucial to our state’s future. While local news startups are providing fresh voices, significant gaps remain.

The state will never see another opportunity like this, with the windfall that has come in from this sale of public airwaves. New Jersey simply can’t afford to let this opportunity — to use some of those dollars to improve civic information, strengthen democracy and make this a better, stronger state — pass it by.

National Report Dings New Jersey’s Tax Subsidy Programs

Posted on May 4, 2017October 10, 2020 by Jon Whiten

Despite making “billions of dollars in incentive commitments in recent years,” New Jersey “has not adopted a plan for regular evaluation of tax incentives,” Pew Charitable Trusts finds in a new national report. The report identifies the Garden State as “trailing” when it comes to the evaluation of its tax subsidy (or incentive) programs.

Pew’s findings echo our own work that has detailed the shortcomings of New Jersey’s tax break laws and oversight processes. And they came the same day that the Economic Development Authority shed new light on the short-term budget hit this surge in subsidies is expected to cause – a cost of $3.3 billion in this and the next four fiscal years.

It’s no surprise that national researchers have found New Jersey’s runaway tax subsidy programs wanting when it comes to evaluation and oversight. New Jersey’s tax breaks for big corporations have gone from bad to worse in recent years, with lawmakers mortgaging the state’s future to the hilt all in order to put more ribbon cuttings on the political calendar.

After years of reckless subsidy policy that has enriched already profitable corporations at the expense of New Jersey’s taxpayers, it’s time for some common-sense reforms. Restoring some semblance of fiscal sanity to these programs, mandating better reporting and evaluation and pulling back on the rewards for merely shifting jobs around the state would be great places to start.

New Jersey’s Subsidy Surge, at a Glance: (all figures are up-to-date through the EDA’s April meeting)

$7.9 billion: Amount of tax breaks approved since January 2010 (a monthly rate of $89 million)

$5.3 billion: Amount of the $7.9 billion that’s come since December 2013, when the “Economic Opportunity Act of 2013” went into effect (a monthly rate of $128 million)

NJPP’s Jon Whiten on Camden Economic Development

Posted on May 2, 2017October 10, 2020 by NJPP Staff

Last Thursday, NJPP Vice President Jon Whiten took part in a community forum hosted by NJTV about economic development in Camden, where he questioned if the recent surge in tax breaks for big corporations will really have a lasting impact on the city’s residents and small businesses.

“Seventy-one percent of those jobs already exist either in the Camden suburbs or in Philadelphia and are already filled by people who are just going to continue to fill them here in Camden,” he said. “So that’s a big problem. It’s great to have jobs in a city, but it’s even better to have people in the city having jobs.”

Full video of the forum is below:

It’s Time for Some Context on ‘Camden’ Job Growth

Posted on April 26, 2017October 10, 2020 by Jon Whiten

On Friday, Congressman Norcross touted new federal statistics “on Camden’s nation-topping employment figures,” while Gov. Christie asserted that “Camden had the nation’s highest percent employment increases [sic] over the past year.”

“Today is another good day for the residents of Camden,” the congressman said. “In the past, Camden was portrayed as crime-ridden, but now it’s job-ridden.”

But a closer look reveals that the facts don’t match the rhetoric tying the job growth to the city of Camden or to New Jersey’s surge in tax breaks in the city: jobs and economic opportunities are still too scarce for Camden city residents.

The job growth being touted was for the Camden metropolitan area that encompasses Burlington, Gloucester and Camden counties, which – at 3.7 percent growth from February 2016 to February 2017 – tied with the Dallas-Plano-Irving metro in Texas for the strongest year-over-year job growth. In all, the Camden metro area added 18,900 jobs during that time and currently has an unemployment rate of 4.8 percent.

Gov. Christie was quick to use the news to highlight the “economic investment and action to promote job creation in Camden” that has been occurring under the state’s runaway corporate tax break program, Grow New Jersey – trying to connect the state’s heavily taxpayer-subsidized and short-sighted economic development strategies to the good employment news.

Any economic growth for New Jersey is news worth celebrating, but it’s also worth noting that the employment situation in the city of Camden is not as promising as in the metro area – and that this surge in tax breaks is overly generous to corporations, bares little teeth when it comes to helping the local economy or growing jobs for Camden city residents, and comes with heavy risk to all New Jersey taxpayers.

In fact, the city of Camden added just 502 jobs during the same 12 months, an increase of 2.1 percent. It’s unemployment rate sits at 9.6 percent, certainly lower than it was when it neared 20 percent during the depths of the recession, but almost identical to the 9.7 percent rate when the recession began in December 2007.

It’s no surprise that the surge in Camden tax breaks – $1.5 billion to 26 companies since December 2013 – has not noticeably improved the job prospects for city residents. First, there’s a natural lag between granting the tax breaks and the time when subsidized projects are completed (the lion’s share have yet to come online). But far more importantly, these projects – by and large – will merely shift jobs that already exist in New Jersey into the city from the surrounding suburbs. Not only will that have a limited impact on Camden’s employment numbers, it’s a seriously flawed approach to economic development.

After all, tax breaks can only do so much to help a distressed city if they aren’t accompanied by public investment in a city’s basic physical, social and economic infrastructure, or by enforceable requirements for corporations to take part in rebuilding a local economy and employing local residents. And the magnitude of the tax breaks to these mostly well-connected corporations clearly puts all New Jersey taxpayers at risk – which, of course, includes the residents and business owners of Camden.

Trump’s Budget Puts New Jersey At Risk

Posted on April 19, 2017October 10, 2020 by Jon Whiten

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

While his campaign promised to “make America great again,” President Trump’s first outline of a spending plan for the nation reflects a slash-and-burn agenda that will increase hardship for working families, cripple key investments in our shared future and widen the gap between the very wealthy and the rest of us.

The president’s recently released “skinny budget” is somewhat light on details, but we know that it cuts crucial domestic and international spending by $54 billion in the 2018 budget, as well as by $18 billion this federal budget year – which is already halfway over.

These cuts are to what’s known as “non-defense discretionary” programs – programs that aren’t entitlements like Social Security or Medicare and aren’t, as the name implies, national defense programs. This spending covers essential public goods, from education to environmental protection to infrastructure and transportation to our (already tattered) social safety net. And where will the money go from these cuts? To military spending and defense contractors, and to build a border wall between the U.S. and Mexico. And, who will be punished by these cuts? New Jersey’s low-income residents who are already struggling to get by in our high-cost state.

Make no mistake: This massive redistribution of federal spending poses a grave threat to hundreds of thousands of New Jersey’s working families and to our state’s budget.

Take the more than $17 billion in grants that the federal government provides each year to New Jersey. This funding – which supports health care, transportation, housing, education, housing, child care, job training and clean air and water, among other priorities – comprises 29 percent of total New Jersey spending, according to a new report from the Center on Budget and Policy Priorities. And nearly all of it is at risk of being severely cut, if not disappearing altogether.

As it stands now, New Jersey’s financial situation is already precarious. Witness the 11 credit downgrades under this governor’s tenure and the state’s ongoing annual struggles to meet its promised obligations, deliver essential services, maintain a robust safety net and invest in the building blocks of our economy – or even balance the budget.

In other words, it’s clear New Jersey has no capacity to replace any lost federal funding – never mind $17.4 billion. That means that the proposal from President Trump would end up forcing New Jersey to cut or eliminate services and programs that help a wide variety of families across the state – particularly low-income and middle-class New Jerseyans.

Take for example just four of the vital block grant programs – for help with heating bills, housing and anti-poverty services – that President Trump hopes to completely eliminate. These cuts – which are just the tip of the iceberg of damage, as they represent less than a quarter of the total proposed cuts to domestic and international spending – would harm hundreds of thousands of New Jerseyans and cost the state nearly $250 million a year in federal dollars.

First, President Trump wants to kill a program that helps approximately 800,000 low-income New Jerseyans — including many poor seniors — pay heating bills. Under the Low Income Home Energy Assistance Program (LIHEAP), New Jersey received $116.3 million in the 2016 federal budget to help these families pay their bills.

The second crucial federal program on the president’s chopping block is the Community Development Block Grant, which supports housing, economic development and social service projects, mainly for low- and moderate-income New Jerseyans. In the 2016 federal budget, New Jersey received $81.3 million from the federal government under this grant.

Then there’s a program that helps develop and preserve affordable rental housing and repair homes of low-income homeowners (HOME Investment Partnerships), and one that provides funding for local governments and nonprofits to provide important anti-poverty services (Community Services Block Grant). These programs brought $24.5 million and $19.2 million in federal funding to New Jersey, respectively, in the 2016 federal budget year. And they too are both fully eliminated in the president’s proposal.

And this doesn’t even begin to touch on the other deep Trump budget cuts that stand to cause even more harm to New Jersey – including cuts to transportation and education spending (both of which would see a 13 percent reduction), the National Institutes of Health (which would see an 18 percent cut) or environmental protection (which is targeted for a whopping 31 percent reduction).

As a high-cost state that is still struggling to crawl out of the Great Recession, New Jersey would be particularly damaged by President Trump’s slash-and-burn approach to the federal budget. The timing couldn’t be worse: At a critical moment when the state is finally starting to see the first hints of an improving economy, these massive cuts would set New Jersey’s recovery back “bigly” and decimate the ability of our state’s struggling residents to begin to climb back into the middle class.

Four Practical Ways for NJ to Raise New Revenue

Posted on April 10, 2017October 10, 2020 by Jon Whiten

This op-ed appeared in the April 6, 2017 edition of NJ Spotlight.

This spring at public hearings, lawmakers on New Jersey’s budget committees listened to a long line of advocates from across the state with a long list of underfunded priorities. The needs, the concerns, and the spending asks of most were not too different from last year. Or the year before. Or the year before that.

It’s time to break this pattern. Instead of the annual ritual of scores of groups with important needs fighting for tiny scraps of an ever-shrinking pie of funding, New Jersey needs to take a serious look at making that pie larger.

And make no mistake: the pie has indeed been shrinking. Tax cuts for businesses and the state’s wealthiest families enacted toward the start of this decade have cost New Jersey between $7 billion and $10 billion in revenue since. And the ill-advised tax cuts passed last year will only serve to shrink the pie even more, to the tune of over $1 billion a year by the time 2019 rolls around. It’s no wonder the state faces chronic revenue shortfalls like the $436 million hole the Office of Legislative Services is estimating for the next 15 months.

And the pie will likely get even smaller this year, thanks to the slash-and-burn budget policies of the Trump administration. The president’s extreme proposal effectively ends the federal-state partnership. The pressure on the state to pick up the tab will be enormous, but covering even a sliver of the lost funds will be impossible without new revenue. The state already can’t meet its current obligations, let alone fill in the holes dug by a radical Trump budget.

Now is the time for action — not next year when New Jersey will be in an even deeper hole. Now is the time for lawmakers to raise new revenue.

When doing so, it’s important to focus on equity: Does the state ensure wealthy individuals and corporations don’t get disproportionate breaks and advantages compared with low-income and middle-class households? The four practical policy solutions below surely pass that test, and could raise well over $2 billion a year in new revenue for New Jersey:

First, increase income tax rates on the top 5 percent of highest-income New Jersey households. Modeled on California’s successful 2012 tax increases —which have so far generated more than $35 billion for key investments in higher education, healthcare, and restoring that state’s fiscal solvency — our income tax proposal would add four new brackets to our state income tax code, and generate over $1 billion a year in new revenue.

Next, close a corporate tax loophole that allows multistate corporations to pay lower taxes than our own small businesses by shifting profits made in New Jersey to subsidiaries in no- or low-tax states. Doing so would raise up to $290 million in new revenue in each year.

Third, roll back last year’s sales-tax cut. It’s no secret that most New Jerseyans will hardly notice the cut. For example, families in the middle of the income scale will save an average of $1.65 a week. Yet the harm on all of us will be profound, with the state set to lose $600 million a year or more each year once the cut is fully phased in.

And last but not least, restore fair and adequate taxation of inherited wealth. Last year, New Jersey delivered a huge gift to the heirs of the state’s wealthiest families — and a blow to everyone else — by eliminating the estate tax. This gives a few thousand wealthy heirs a huge tax break while draining the state of about $500 million a year. New Jersey ought to either restore the estate tax by bringing it back with a slightly higher threshold or expand the related transfer-inheritance tax to affect direct heirs (such as children and grandchildren) while raising the threshold at which this tax kicks in to protect lower- and middle-income heirs. Restoring fair and adequate taxation of inherited wealth could generate anywhere from $200 million to $500 million in revenue each year.

Beyond these four policy proposals, there are plenty of other solutions that ought to be on lawmakers’ lists. Here are a few: applying the sales tax to services used most heavily by families with greater means (like interior designers, accountants, or bookkeepers); legalizing, regulating, and taxing marijuana; and working with other states to close the “carried interest” loophole at the state level — or, when the time comes, to “repatriate” big federal tax cuts for wealthy New Jerseyans.

New Jersey’s lawmakers have two paths from which to choose.

Inaction means that next year’s budget hearings will be a reprise, with many of the same advocates fighting for even fewer and smaller scraps from an ever-shrinking pie of resources.

The smarter path — one of tax fairness and budget adequacy — means that New Jersey can finally start to collect the revenues it needs to provide essential services, help those who are struggling, and invest in the building blocks of a strong economy. The results might not be automatic, or immediate — but make no mistake, there will be results: a stronger, fairer, and better state.

What ITIN Filers Should Know Before Filing Their Taxes

Posted on March 28, 2017October 10, 2020 by Erika J Nava

One of the biggest myths about undocumented immigrants is that they do not pay taxes. In reality, they do – and quite a lot. In New Jersey, undocumented immigrants pay about $587 million a year in state and local taxes, mostly through sales and property taxes – but also through income taxes.

While our undocumented neighbors pay sales or property taxes much in the same way we do – when they purchase a product or pay their rent or mortgage – for income taxes, it’s a bit different. Since they lack the required Social Security number, all undocumented residents who are filing income taxes use what’s called an Individual Taxpayer Identification Number (ITIN), which is provided by the Internal Revenue Service (IRS).

Starting this tax season, some taxpayers will be required to renew their ITIN number before the IRS can mail them their refund. Here’s why, and what ITIN taxpayers need to know.

Under legislation passed in 2015, ITIN taxpayers who either haven’t filed a tax return for the last three years or who received their ITIN before 2013, are required to renew their numbers. (The latter category is required to renew their ITINs on a rolling schedule – for more details, see the IRS’s explanation.)

It’s estimated that about half of undocumented immigrants use ITIN numbers to file taxes. While precise numbers of total ITIN filer in New Jersey are not available, we do know that there are nearly 4,000 New Jerseyans who have ITIN numbers expiring this tax season; the city and county of Passaic are both home to the highest numbers (368 and 621, respectively).

To renew an ITIN, an undocumented worker must complete and submit the W-7 form and check the “renew an existing ITIN” box. The most important part is to include the documents that prove your identity. The documents must be verified by either presenting them to the IRS national office, having an IRS-certified agent approve them or via an appointment at one of New Jersey’s eight Taxpayer Assistance Centers.

Remember: ITINs can’t be used in place of a Social Security number to work legally in the United States, and can’t be used to apply for public benefits or the Earned Income Tax Credit. What’s more, undocumented immigrants aren’t the only people who use ITINs. Nonresidents who receive taxable income in the U.S., foreign students and dependents of U.S. citizens who don’t have Social Security numbers are among the other types of people who use ITINs.

In today’s hostile climate toward immigrants, there are distinct pros and cons to using an ITIN to file taxes. There are very real and growing concerns that current protections of ITIN holders’ private information could be erased by Congress or the administration. However, filing taxes proves one’s economic presence, establishes a record of one’s work history and demonstrates good moral character by complying with American tax law.

Blueprint for Economic Justice & Shared Prosperity

Posted on March 10, 2017October 10, 2020 by NJPP Staff

From the President

For more than 20 years, New Jersey has been on a downward economic and financial slide. Our middle class is shrinking. Poverty is rising. The state government is effectively bankrupt. We’re dangerously close to hitting rock bottom.

The next governor is New Jersey’s last, best chance to slow the state’s collapse, restore its stable financial foundation and rebuild its enterprising, job-creating, wealth-producing economy.

How did we get here?

The Jersey Slide began with a familiar false premise: cut taxes, and the savings will stimulate economic activity and increase state revenues. Hence a 30 percent cut in income tax rates in 1994, which produced immediate declines in state support for property tax relief and set off a two-decade chain reaction of gimmicks to hide the damage.

Gimmicks like slashing the state’s payments for public employees’ pensions and retiree health benefits enough to make up for revenues sacrificed to the tax cuts. Like granting local governments a pension payment “holiday” to keep property taxes from spiking.

And, in a damning blow, borrowing almost $3 billion to cover the state’s share of pension costs for two or three years – sticking unknowing future taxpayers with the very large repayment bill.

Along the way, a bipartisan cast of governors, legislators and justices ignored the urgent warnings of financial experts, and violated state constitutional protections intended to safeguard against precisely these types of abuses. Because the constitution is clear: you can’t spend money in the annual budget that isn’t raised in the same year, and you can’t borrow money long term without voter approval.

Now the chickens are coming home to roost. The games and gimmicks must stop. It’s time for truth telling, and courageous action.

I understand the challenge. I’ve run for office five times and participated in numerous campaigns. Not once has someone come up and asked: “Gee, my taxes are pretty low, can you do something to raise them?”

But people’s concerns about the taxes they pay often mask concerns about how their taxes are spent:

• “Potholes cost me $800 for new tires.”
• “I thought public colleges were supposed to be affordable.”
• “The high school cut my kid’s band class.”
• “The district said it’s not safe for my kid to drink water from the tap.”

These complaints lay bare a fact that’s been too-long neglected by our political leadership: Residents want New Jersey’s enviable assets to be properly maintained. People understand that investments in the assets we all share are paid for by the taxes we all pay – taxes that should be levied in a fair and equitable way.

The idea that the state needs to protect and invest in its assets is what drove New Jersey’s thriving economy from the 1960s into the early ‘90s. Those were the years when the state invested strategically in public transportation; in public colleges and universities; in preserving open space; in protecting the environment; and beyond. The state’s robust opportunities and vibrant communities attracted striving immigrants from around the world, who in turn fostered further economic growth. The result: New Jersey transformed itself from a fading industrial state into an enterprising, prosperous and stable state with a robust middle class and a plentiful opportunity.

That was then. The picture is starkly different now. After ten credit downgrades in seven years, New Jersey ranks 49th among the 50 states for creditworthiness. Our once robust biotech and pharmaceutical industry is being lured to states that are accelerating – not slashing – public investments in innovation centers like university hubs. Inequality is at historic highs. In this high-cost state, which never bounced back from the Great Recession, New Jersey’s working families are finding it harder than ever to make ends meet and give their children opportunities to advance.

Here’s the good news: New Jersey still has enviable assets. And it’s not too late for new leadership to stop the state’s downward spiral. No candidate should promise that it’ll be easy or painless to restore New Jersey as an engine of enterprise and opportunity. Nor should anyone suggest that one term as governor or as a legislator will be sufficient.

But big ideas, carefully planned and plainly explained, are the starting point.

That is the work of New Jersey Policy Perspective, and specifically, this Blueprint.

– Gordon MacInnes, President

Topic Category: Tax and Budget