Greener Pastures Outside Garden State?

March 31st, 2006 by Tim Evans

Census figures show New Jerseyans continue to leave the Garden State in significantly higher numbers than new residents are arriving from other states.

Those moving out between 1990 and 1999 exceeded those moving in from other states by 378,495 – more than the entire population of Mercer County (350,761), or Newark, the state’s largest city (273,546).

Large numbers of New Jerseyans moving west are skipping over the counties of Warren, Sussex and Hunterdon for eastern Pennsylvania, making Pike and Monroe counties in the Poconos the two fastest-growing counties in the entire northeast, according to a migration analysis by New Jersey Future.

Reasons commonly cited for the exodus from New Jersey include the state’s high cost of living, with the nation’s highest median property tax bills an exacerbating factor.

(Source: US Census)

TIME IS NOW FOR PROPERTY TAX REFORM
While viewed by many as necessary and even long-overdue, the tough measures in Governor Corzine’s proposed state budget will increase the fiscal squeeze on New Jerseyans who are already opting in large numbers for homes in lower-cost states, especially Florida and Pennsylvania.

The Governor’s proposals for meeting an extraordinary budget shortfall and reduced borrowing include hiking the 6 percent sales tax by one percent. Even more significant, the new budget would hold state aid to schools and municipalities at last year’s level, sure to necessitate a need to raise property taxes to cover naturally rising local expenses, or cuts in local services.

Already, property taxes have risen an average of seven percent in each of the past four years, the direct consequence of a broken tax system that is overly reliant on property taxes, and out of step with national norms.

The Governor has promised that fixing the property tax system is next on his agenda once the budget has passed, acknowledging to one newspaper’s editors, “Unless we get property taxes in order, we’re really going to start losing people in the next two or three years.”

The Governor’s office and Legislature should start now by dedicating staff and laying the groundwork for serious tax reform discussions to begin in July, as soon as the budget is passed. Waiting until fall means missing the deadline for voter action in 2006 on either constitutional amendments or a constitutional convention on tax reform. Such controversial ballots are even more unlikely in 2007, with the entire Legislature facing election.

Instead, the Legislature should address the state’s tax crisis immediately, in lieu of its regular six-week spring budget break and annual two-month summer recess. Such a sacrifice would demonstrate clearly that our leaders understand and support the need for reforms to ease the fiscal burden on constituents and to strengthen New Jersey as a desirable place to live and work. New Jersey can’t afford to wait.

For questions about this issue of Future Facts, contact Tim Evans, research director.