From InsiderNJ:
GSI Analysis: NJ’s Workforce and Revenue Results Are True Indicators of the State of Our Economy
“While a declining unemployment rate is good news, our workforce remaining below 2008 levels is one sign there’s more than meets the eye when it comes to New Jersey’s economy,” said GSI’s president Regina M. Egea. “Our weak GDP rate shows an economy that’s stagnant while others are booming and we have looming questions regarding our revenue sources in the event of an economic slowdown.”
A leading indicator of the lagging state of New Jersey’s economy was the July release of Q1 2019 Gross Domestic Product data from the U.S. Bureau of Economic Analysis. While the national economy reported a strong 3.1% rate, New Jersey reported a rate of 1.8%, trailing far behind other states in the region; including Delaware (3.9%), New York (3.8%),and Pennsylvania (2.9%).
The civilian labor force remains 60 thousand below the 2008 average workforce size of 4,504,400 (vs. today’s 4,445,800.) Employment increased by 11,000 and unemployment declining by 9,400, as the workforce size increased by 2,400.
Job losses were recorded in five out of nine major private industry sectors. The Leisure and Hospitality sector led sectors with losses, declining by 2,200 jobs during the month. The Trade, Transportation, and Utilities sector led gains with 1,600 new positions. An ongoing cause for concern remains the Financial Activities sector which lost 200 jobs for a total of 5,800 year to date. New Jersey has led the nation in job losses in that sector year over year.
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Yesterday’s release of the monthly Treasury revenue report also illustrated some warning signs ahead for New Jersey’s economy and taxpayers.
The report noted strong overall revenues, including the Corporate Business Tax (CBT) totaling $177.8 million for the month of July, up $43.8 million, or 32.6% percent, over last July. Of concern, the Treasurer noted that the state is now “more than halfway through the second year of a temporary, two-year 2.5% surtax in the CBT on income above $1 million. Beginning in January, the temporary surtax will decrease to 1.5% for two more years before phasing out.” The surcharge made New Jersey’s corporate tax the second highest in the nation and to-date neither Governor Murphy nor legislative leaders have articulated a plan to replace the revenue in future years leaving the state exposed in the event of an economic slowdown.
Also of concern is a 2.2% decline year over year, or approximately $11 million, in the collection of the tax on gasoline. In August 2018, the Treasurer announced that due to a 4.4%, or $22 million, year over year decline in gas tax revenues, the state would be increasing the tax on motor fuels by 4.3 cents per gallon. The Treasurer has yet to announce whether this year’s decline will result in another increase.
Well, this is great news…
Towards the end of the article…the author advocating for more taxes?
No, what the author is saying is NJ’s idiot tax increases shifted gas purchases from NJ to Pennsylvania and Delaware, reducing overall tax collections.
Taxes rate went up, revenue collected fell.
So now the rate needs to go up again, to compensate for the decline in gas purchases.
Which will result in more of a shift.
They skipped the day in Econ 101 when they discussed price elasticity of demand.
We would have more money for transportation infrastructure if they simply never raised the tax in the first place.
Since NJ’s population centers are not near the boarders of PA or DE, how do you conclude consumers gassing up in those states instead of NJ being the reason for lower revenues? Is it possible that people are using less gas due to working remotely, online shopping, more fuel efficient vehicles rather than driving to other states to gas up?
30 year, what you say is not incompatible with what Grim said. Truckers can definitely shift fueling locations, and NJ residents can also change behaviors as you indicated. But it does show that NJ bureaucrats are bad at forecasting the conomic consequences of their tax and spend proclivities.
Since NJ’s population centers are not near the boarders of PA or DE, how do you conclude consumers gassing up in those states instead of NJ being the reason for lower revenues?
There are more than 250,000 people who cross the border between PA and NJ every day for work.
The PA contingent here can weigh in, but it was fairly common that every single one of those PA residents would gas up in NJ, due to the lower gas price. The NJ contingent, generally wouldn’t gas up in PA due to the higher price.
Gas prices are now at parity, so there is no longer any financial benefit to purchasing gas in NJ.
This is material.
We’re talking about a 27 cent per gallon differential moving to zero.
Average gas tank size is 12 gallons, so less say 10 gallons per fill. That’s $2.70 per fillup, and probably something like $100-150 a year.
People are fairly sensitive to gas price differences, often to the point of it being irrational. Driving further distances to save pennies a gallon, despite the real cost being higher.
Our “D” was in chop both before and after the gas tax increase. Gas prices (outside of Edison) in NJ are the cheapest down along the Delaware Bay/River from Philly South. Carney’s point, Pennsauken (probably because it’s refined there) Bellmawr, all were a solid 30 to 50 cents cheaper than across the river in Philly, Wilmington, Chester, etc.
Before the gas tax, the wait times at many of the stations were intolerable. After, the tax increase, gas was still cheaper in NJ, but only by about a dime or so. Now, we never wait when filling up.
There was definitely a switch. Anecdotally proven. Will look up the Pensy gas tax revenue numbers for absolute proof, though NY probably should factor in as well, to some degree.
Yeah I used to always tank up before going into NY State, I don’t bother now.
30 year gets a bit touchy every time someone suggests his progressive panacea is a load of bull.
I hope Trump wasn’t hoping for a strong economy to land re-election.
I was doing the PA thing until they installed a new toll on I95 over the delaware
The next question I have is how Murphy is going to stick the rest of us for the bill to replace Newark’s water system. That’s coming any minute.
With the usual disclaimer that I think the Orange One is unnatural and that I have never voted Republican in a Presidential election (too young when Reagan ran)….
You really have to like this guy if you’re not a liberal or SJW or have libertarian/non-conformist leanings.
Trump wants to purchase Greenland from Denmark….
Can’t make this shit up lol.
https://www.wsj.com/articles/trump-eyes-a-new-real-estate-purchase-greenland-11565904223
45,
I comment sparingly here. Lately it is typically in response to something hateful and stupid that someone has said. You are often the person making the hateful or stupid comment.
This morning I asked 2 questions that were not political. Not sure what you saw there.
Regarding my progressive panaceas that you refer to, please point out any policy issues I have discussed here. Advocating against hate speech is not a progressive panacea. It is about being an American and loving this country. “We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness….”
Looking at the data, I would say that fuel use is slowing most likely due to these taxes. The impact of the huge NJ increases that took it from 2nd cheapest to 9th most expensive in the last 3 years has definitely allowed Pennsylvania to maintain their tax revenue while NJ systematically lost theirs.
Nothing like a tax that lowers revenue to appreciate the government we put in place.
Chart here: https://docs.google.com/spreadsheets/d/1VKV6j-pa5zdA5Kk18wM8JGjfIet5oHHkaqNWwXX3_FE/edit?usp=sharing
In other news, Mikie Sherrill continues to pound the pavement over the need for a new rail tunnel as the rest of the dumb Dems pound the pavement over gender, race and sexual orientation issues.
Look, we should use taxes to disincentivize behavior.
Let’s start with a disposable plastics tax. If you purchase something that comes packaged in plastic destined for a landfill (recycling is a lie), pay for the convenience of the packaging.
We should also tax high day and high sugar foods. Let’s start with a penny per calorie of saturated fat and simple carbohydrate.
The problem is, that was not the intent of the gas tax.0
2019 is an estimate, and is likely an overestimate at this point, but we won’t go there.
That’s got NJ down 8.2% and PA down 5.3% from 2016 – which was the year of the first large tax increase.
Yes people in NYS and PA used to fill up every time when passing through. The people in Rockland and Orange counties in NY pretty much exclusively bought gas in Jersey. You also cannot discount trucking, where in the past Jersey would have been the preferred destination for fueling up.
If the results this year from the gas tax are still worse perhaps instead of increasing the tax again we repeal the original increase. I assure you increases in price lead to reduced demand, once NJ prices are higher than NY or PA we will see people crossing boarders to buy gas in the reverse even if it’s only occasionally, NJ is a small state. To Grim’s point I always used to fill up before crossing the boarder into NY but now I don’t bother unless I need gas. If NY gas becomes cheaper than NJ, I’ll wait to fill up in NY if that’s where I’m heading.
Vehicle efficiency is part of it but I doubt it is what is moving the needle. The scary thing is this during a period of low oil prices when people are buying more gas guzzlers. Believe it or not but the trend toward SUV’s should be a clear indicator that fuel efficiency is not a key concern. Grim’s point about people being irrational is key, but the expedition but then drive 20 miles out of your way to save a nickel on gas…
Buy the Expedition, not but…
Once NJ’s gas taxes exceed our neighbors, we’ll add a per-mile tax on annual vehicle registrations to ensure we’re monetizing road utilization directly. The politicos will talk about this in terms of vilifying wealthy electric vehicle owners who aren’t paying their fair share. We’ll go ahead and build a new bureaucracy around going to the DMV for your annual odometer reading. Think of all the new jobs we can create.
“We’ll go ahead and build a new bureaucracy around going to the DMV for your annual odometer reading. Think of all the new jobs we can create.”
Why think small grim….let’s just go full Weimar and Soviet Union. Send the masses out to break all the windows so we can employ people and manufacturing to rebuild them. Have employees come in and erect scaling and piping in their facilities, and the next shift come in and take it down. Now we’re talking real job growth!
“If the results this year from the gas tax are still worse perhaps instead of increasing the tax again we repeal the original increase.”
LOLOLOLOL. LOL. LOLOL.
Are you here all week? I’d like hightop seating for three for the next comedy show.
The gas tax is nothing compared to the loss of the business surcharge that is getting phased out. Just watch the pressure it is going to add to next years state budget.
Anyone have any opinions on the recent GE vs. Harry Markopolos battle?
Do not forget that the tax revenue function also has as a variable of retail gas prices. Ceteris paribus, even without substitution across state borders, gas prices are down, and that in itself would explain both NJ & PA running below estimated.
grim says:
August 16, 2019 at 11:41 am
2019 is an estimate, and is likely an overestimate at this point, but we won’t go there.
That’s got NJ down 8.2% and PA down 5.3% from 2016 – which was the year of the first large tax increase.
chicagofinance, NJ (and Federal) gas taxes are fixed price per gallon, not a function of the retail gas price. So the tax is independent of gas tax. This implies from economic theory that tax revenues would actually increase due to driver preference to buy more gas at lower prices…..
independent of gas price….
Aloha Financial Samurais,
Did you know the average 55 – 64 year old American is a millionaire? That’s what I discovered when doing research for my post, The Median Net Worth For The Middle Class, Mass Affluent, And Top 1%. Data is from the Federal Reserve’s Survey Of Consumer Finances.
With so much negativity surrounding the financial state of the average American, it’s good to see the average person doing so well. Is there any wonder why so many people want to come to our great country?
Image
Even if we look at the median net worth of $187,300 for the 55 – 64 age group, that ain’t too shabby either. Add on the average individual Social Security benefit per month of $1,461 and the typical American should be just fine. If you can spend your remaining years with someone who also receives Social Security, dare I say you’ve reached nirvana!
Another way to look at the $187,300 median net worth figure is to compare it to the median home price in America of $227,000. Having a net worth equal to 82% of the median home price is a fantastic percentage.
That’s like folks in San Francisco having a median net worth of $1,300,000 or folks in Honolulu having a median net worth of $648,000. Not bad!
Yes, I may be overly optimistic. But I’ve found that more good things tend to happen with a positive attitude.
The Average Net Worth For The Above Average Person: Everyone reading this newsletter is above average because average people don’t spend their weekends reading about personal finance. As a result, I eventually expect all of you to have above average net worths if not already. Let’s do this!
Everything is relative when it comes to money. If we all earn $1 million dollars a year and have $5 million in the bank at the age of 40, none of us are very wealthy given all our living costs (housing, food, transportation, vacations) will be priced at levels that squeeze us to the very end.
As such, we must first get an idea of what the real average net worth is in our respective countries, and then figure out the average net worth of the above average person!
According to the Federal Reserve’s Triennial Consumer Finance Survey, the average net worth for the following ages are:
Under 35: $76,200
35-44: $288,700
45-54: $727,500
55-64: $1,167,400
65-74: $1,066,000
75+: $1,067,000
Not bad. But these numbers are skewed by the super rich who have generated an enormous amount of wealth since the financial crisis.
Although the average net worth for all Americans is $692,100, the median net worth is a more pedestrian $97,300.
https://www.financialsamurai.com/the-average-net-worth-for-the-above-average-person/
Describes the posters on this blog to a tee. Perfectly describes my wife and I.
“Let’s look at the average net worth for above average people.
The Above Average Person is loosely defined as:
1) Someone who went to college and believes grades and a good work ethic do matter.
2) Does not irrationally spend more than they make.
3) Saves for the future because they realize at some point they no longer are willing or able to work.
4) Takes responsibility for their own actions when things go wrong and learns from the situation to make things better.
5) Takes action by leveraging free tools on the internet to track their net worth, minimize investment fees, manage their budget, and stay on top of their finances in general. Once you know where all your money is, it becomes much easier to optimize your wealth and make it grow.
6) Welcomes constructive criticism and is not overly sensitive from friends, loved ones, and strangers in order to keep improving. Keeping an open mind is critical.
7) Has a healthy amount of self-esteem to be able to lead change and believe in themselves.
8) Enjoys empowering themselves through learning, whether it be through books, personal finance blogs, magazines, seminars, continuing education and so forth.
9) Has little-to-no student loan debt due to scholarships, part-time work, or help from their parents. Our parents have saved and invested through the largest bull market in history. It’s understandable that parents want to help their children out.
Now that we have a rough definition of what “above average” means, we can take a look at the tables I’ve constructed based on the tens of thousands of past comments by you and posts I’ve written to highlight the average net worth of the above average person.”
The Importance Of Real Estate
The Federal Reserve study showed that the average net worth of a homeowner is roughly $1,034,000 or 11X greater than the average renter’s net worth of $91,000.
We can debate the merits of this study all day long (demographic sampling, housing price changes, etc), but the point is: “above average” people generally all own homes and are wealthier.
The return on rent is always negative 100%. You get a place to live and that’s that. There is never a positive return on an asset after a month, or 30 years of renting. A renter cannot pass on her paid off house to her kids or grandchildren. There is no asset accumulation at all. There is a reason why some 97% of millionaires are property owners.
The value of real estate varies across all the land and the world. It is very hard to make an assumption of what should be inputted as a result. According to the US Census bureau, the median home price in America is roughly $265,000 as of 2019.
“Vote Blue to Receive Your Screw.”
I don’t honestly know what’s dumber… 1) Delusional Democrats like Murphy who constantly want to raise taxes on the struggling citizens or NJ or 2) the citizens who vote for such Dem morons.
Everywhere you look, concerns over the housing market appear to be growing.
Residential investment peaked in late 2017 and has been falling since. Nobel Prize-winning economist and New York Times columnist Paul Krugman recently quipped that housing was “an extra reason to be worried about the economy.” And recent news reports have raised similar concerns.
But these concerns are wildly overblown. Contrary to the hand-wringing, the US housing market is in fact normalizing, and that is mostly a positive development for the American economy.
https://apple.news/AqcegPNCVSs-HlWX81aPhUQ
The housing market is getting back to normal
The main story in the housing market is one of normalization. A popular trope in recent years has been the dearth of first-time homebuyers. Housing has been largely propped up by investors and cash deals, or so the story goes. This is really yesterday’s story.
Look at the resale market. As of June, first-time homebuyers represented 35% of total resale purchases, the highest since at least 2011. All-cash deals and investor purchases have seen their share of total purchases plummet. Distressed sales are down and conventional sales are up.
The world’s headlong dash to zero or negative interest rates just passed another milestone: A bank in Denmark is paying homebuyers to take out mortgages.
Jyske Bank A/S, Denmark’s third-largest lender, announced in early August a mortgage rate of -0.5%, before fees. Nordea Bank Abp, meanwhile, is offering 30-year mortgages at annual interest of just 0.5%.
Years of easing by central banks hacked away at interest rates around the world, distorting the traditional economics of lending and borrowing. This is most pronounced in Europe, where a composite home-loan rate across the euro area fell to 1.65% in June, the lowest since records began in 2000.
https://apple.news/Ay07IQ1LoTVmdUZlk3luVsA
No wonder Denmark wants to sell Greenland to Trump
https://patch.com/new-jersey/wayne/s/gtb3d/what-1m-gets-you-in-the-nj-real-estate-market?utm_source=alert-breakingnews&utm_medium=email&utm_term=real-estate&utm_campaign=alert
🤣
Grim says:
August 18, 2019 at 10:03 pm
No wonder Denmark wants to sell Greenland to Trump
“Nobody gets upset that Steph Curry or Beyonce makes a certain amount of money, but the person who is an usher at the stadium makes a fraction of what they made,” says Carol Roth, CEO of Intercap Merchant Partners.
https://www.cnbc.com/2019/08/16/ceos-see-pay-grow-1000percent-and-now-make-278-times-the-average-worker.html
Spot on with this write-up, I really feel this site needs a great deal more
attention. I’ll probably be returning to see more, thanks for the info!