New Jersey has ranked as the highest outbound state since 2012. In other words, our state had the highest percentage of people moving out versus moving in compared to the other 49 states.
Even as the economy is doing better nationally, our state is lagging behind – and people are taking notice.
An annual survey by a national moving company, which recently released its 42nd report, found that twice as many people left our state than came last year. The embarrassing streak should be a cause for concern, because the people who are leaving can afford to, and the people who are staying are paying the price.
After income taxes were increased in 2004 on people earning over $500,000, New Jersey lost $18 billion of gross income over the next nine years. Then the problem got worse. In 2013, 35 percent of the people who moved out earned over $150,000, just three years later it was 45 percent. High-income residents decide to reside elsewhere because they are taxed more than in any other state.
Unfortunately, the problem is getting worse and the policies that got us to this point haven’t changed.
The lesson is easy to learn. Whether it is businesses or individuals, it costs a lot to make a lot of money in New Jersey and costs a lot more for low- and middle-income families. Those families face a greater cost burden when wealthier residents leave.
The last budget cycle made that evident. Taxes were hiked by $1.5 billion, with the largest tax increases on the people and businesses making the most money. But worse is that 12 of the 18 tax increases were on the working poor and middle class who can least afford to live here. There are now taxes on Uber and Lyft, vacationing down the shore, shopping online, health care and utility bills.
Taxes are what make living in New Jersey unaffordable, and those who can’t afford to live here are leaving. The same is true for our expensive neighbors New York and Connecticut, while the opposite is true for affordable states in the West and the South. It’s hard to go somewhere and not find someone from Jersey.
The exodus of New Jerseyans is especially staggering because raising taxes is the only way to keep up with spending increases, and it’s the high cost of those taxes that is driving people away. For example, taxes were hiked $1.5 billion last year to fund a $2.7 billion spending increase. That is a noticeable repeat of budget mistakes from 2002 through 2008 that increased spending by $10.6 billion in seven years.
History tends to repeat itself. The 115 tax increases that were passed in those seven years weren’t enough to keep up with the reckless spending spree. New Jersey has averaged only 91.3 cents of revenue for every dollar spent, an average annual 8.7 percent deficit since 2002, and was the only state that had a deficit every year according to Pew Trusts.
The result is that the state faces $221 billion of debt. It’s not a secret that New Jersey’s financial condition has become dire.
Of course spending beyond what taxpayers can afford is a major problem, but the fact is that the top 1 percent of taxpayers provides about 40 percent of income tax revenue and the top 10 percent provide about 70 percent of revenue. That is why when billionaires leave the state, like one did a few years ago, the state is at risk of losing hundreds of millions of dollars in revenue – worsening the annual deficits.
The people who stay in New Jersey are forced to pay the price, and that isn’t tax fairness. Fair also isn’t raising taxes on everyone, which was the budget compromise last year.
Fair is making New Jersey affordable by cutting taxes for everyone, and trimming the budget so the working poor and middle class aren’t on the hook for the same bad habit of spending money that taxpayers need to pay their own bills.
People are leaving New Jersey because it is too expensive. The people who really need a change of scenery are the politicians who have controlled the Legislature and the budget process for the past 17 years. Taxpayers can’t afford their irresponsible policies anymore.
Assemblymen Kevin J. Rooney and Christopher P. DePhillips represent parts of Bergen, Essex, Morris and Passaic counties in the 40th Legislative District.
Read the full story at NorthJersey.com