From the WSJ:
That headline arrives via email from a money manager in northern New Jersey. The Garden State already has the third largest overall tax burden and the country’s highest property tax collections per capita. Now that federal reform has limited the deduction for state and local taxes, the price of government is surging again among high-income earners in New Jersey and other blue states. Taxpayers are searching for the exits.
In the financial industry of course it’s not just the clients who are looking for greener pastures. One hedge fund manager moving his office to a southern state reports that his new home on a golf course will be more than double the size of his house in Chatham, N.J. while generating just one third of the current property tax bill.
Others are staying out of necessity, but that doesn’t mean they want to bet on a Jersey comeback. “The apartment market in New Jersey is booming because nobody wants to own here. As soon as people are not tied to the area for business reasons, they leave,” says Jeffrey Sica, founder of Circle Squared, an alternative investments firm. “We structure real estate deals for family offices and high-net-worth individuals and at a record pace those family offices and individuals are leaving the TriState for lower-tax states. Probably a dozen this year at least,” he writes via email.
In the decade ending in 2016, real economic growth in New Jersey clocked in at a compound annual percentage rate of 0.1, just slightly higher than John Blutarsky’s GPA and less than a tenth of the national average for economic growth.
The Tax Foundation ranks New Jersey dead last among the 50 states for its business tax climate. So naturally new Governor Phil Murphy is proposing an even larger tax burden. A little more than 100 days into his term, Mr. Murphy seems determined to make New Jersey residents miss Chris Christie.
Steven Malanga calls Mr. Murphy’s plan “the U-Haul Budget” for the new incentives it gives New Jersey residents to flee. Your humble correspondent participated in a panel discussion at an event hosted by the Garden State Initiative today and was pleased to discover that at least some residents of New Jersey are not yet ready to abandon hope. They’re urging Gov. Murphy to make the state’s tax burden competitive again. Following federal reform, the residents who remain in blue states have a whole new reason to demand that politicians put out the fire.