From the Record:
A new study suggests that New Jersey could expand its economy by $150 billion and create a quarter-million new jobs over the next decade by making a number of policy changes regarding business operations in the state. The report by consulting firm McKinsey says that the state needs to nurture young businesses, improve roads and mass transit options and better tailor incentives to promote growth.
This is correct as far as it goes, but the report barely scratches the surface on why New Jersey is struggling to gain younger businesses and misses a looming economic crisis. The why is best explained by Rutgers professors James Hughes and Joseph Seneca. They write about how New Jersey successfully evolved from an urban manufacturing-based economy to one that made the state an economic success story based on suburbanized information and research-driven employment.
“The baby boom will soon be yesterday’s workforce. Tomorrow’s workforce will be dominated by a new, expansive generation… such young creatives… currently do not find the car-culture suburbs in which they grew up an attractive place to live, work and play,” according to Hughes and Seneca.
“Suddenly, New Jersey’s greatest core advantage in the late twentieth century — a suburban-dominated, automobile dependent economy and lifestyle — is now regarded as a disadvantage,” they add.
New Jersey is the most densely populated state in the nation. It’s also the most suburban U.S. state, which means plenty of malls and office parks. Not too long ago these properties helped make New Jersey the most prosperous of the 50 states.
That is no longer the case today.
In fact, too many New Jersey suburban towns – most of New Jersey – are facing a perfect storm that could lead to significant property tax increases unless mayors and state leaders take action soon.
Here’s the reality: Suburban office parks are going the way of dinosaurs unless they are reimagined. Left unchanged, each of these formerly hefty taxpayers are going to be a drain resulting in tax reductions that will have to be absorbed by homeowners.
In Bergen County, many towns are struggling with the best way to replace these office park dinosaurs. Too often, municipal leaders have chosen to hope the these office parks will again fill with white-collar employees whose property owners pay significant taxes and demand little in the way of local services. That time has come and gone and local leaders cannot wish the current trends away.
On top of that is the lack of affordability of suburban housing for the middle-skilled worker the McKinsey report describes. More than a quarter-million residents left New Jersey in 2015 as our state ranked last in income growth and had the highest property taxes. Simply stated, to remain an economically strong state New Jersey must make housing more within reach of all worker, especially the middle-skilled ones.