From the APP:
Here are the top three reasons New Jersey lost:
1. Too expensive for Amazon: Seven billion dollars of tax incentives wasn’t enough. New Jersey made national news when it became known that it offered Amazon $7 billion in tax incentives to move to New Jersey. However, that number needs to be put in context. New Jersey is the most expensive state in the union to do business and often ranks dead last in business-friendly environments. Given the high sales, income, property and business taxes imposed by the state, we needed to offer $7 billion in concessions to just be on par with states who offered fewer concessions but were more attractive because of their low taxes and low-cost basis.
The lesson here is that New Jersey needs to get its house in order. No big business or tech company wants to make a home in a state that is strained under its own debt. Simply put, the state is too expensive for tech and venture capital. When smart founders and CEOs look at the numbers, they say that being in New Jersey will actually be more expensive than being in New York City. I was shown by venture capitalists why New York City is a better place to base their home than New Jersey because of how the state taxes funds.
2. The New Jersey Sandwich: For years, New Jersey has tried to compete with New York for tech talent. However, we must accept the fact that New Jersey will never have the same ecosystem that New York City has for attracting talent. Every year, several hundred thousand people move to the city to be the next startup founder or Wall Street hot shot. I have been pushing for New Jersey to develop it’s own “core” in complex manufacturing, IoT, AI and robotics, areas that New York City does not yet have a market lead in. It’s imperative that we aggressively push industry sectors where we can win and get them going in New Jersey as soon as possible.
I have noticed an alarming trend that I refer to as the New Jersey Sandwich. Many founders and tech companies from both the West Coast and East Coast are moving to the Midwest and surrounding area. The reason: lower costs, lower taxes, better quality of life for employees and more friendly regulations. I was recently on the phone with a CEO who was excited at moving over half his company from New York City to Nashville. He said that he will be able to pay a lower base, but the employees will have a higher quality of life, their dollar will go farther and in most cases a working family can have one partner be a stay-at-home parent.
3. The Talent Drain: New Jersey ranks first in the country in millennials moving out and last in the country in millennials moving in. I had one CEO tell me that he does not even recruit out-of-state hires because it’s so hard to get them to move to New Jersey. If we keep draining young talent at this rate, New Jersey will become an even tougher place for tech innovation.