New Jersey’s Ruin

[New Jersey politicians] are steering the Garden State toward ruin at an astonishing pace, and no amount of bad economic news seems capable of deterring them.

Jersey’s decline has been rapid and astonishing. Back in the 1960s, one study judged it among the country’s ten most business-friendly states because of its light tax burden, which allowed it to attract a steady stream of businesses and residents from New York. Though there were occasionally signs of trouble over the years—like the pension shenanigans of Governor Christie Whitman, in which government shirked its long-term obligations—the state’s real decline started with the election of Jim McGreevey and a Democratic-controlled legislature in 2001.

In the middle of a recession, McGreevey and the legislature raised taxes and fees an astonishing 33 times to raise $3.6 billion. The state also passed a heap of labor-friendly, antibusiness laws that rapidly worsened conditions. The McGreevey administration hammered an executive at one of the state’s biggest employers, Federated Department Stores, for announcing that the new taxes would force the company to reevaluate future growth plans in Jersey; is it any surprise that one reason the state’s newspapers are suffering today, according to an ad executive, is retrenchment of local department stores? In 2002, the Beacon Hill Institute rated Jersey 26th among the states in overall competitiveness, but by 2004 Jersey had plummeted to 44th, the largest decline of any state, noted the institute, which also ranked Jersey’s government performance next to last among the states—in case you were wondering what prompted the decline.

Friends report state workers at all levels playing video games, emailing relatives all day because they have absolutely nothing to do. Corzine won’t touch the bloated beuracracy. But he abolished the death penalty with a notorious child rapist murderer on death row, while crowing about “morality”. And he plans to legalize gay marriage “after November”.

The article is generally on target, but it contains several inaccurate or misleading items.

1. The 2006 budget battle in New Jersey -- despite the fact that it resulted in a substantial tax hike -- actually represented a dramatic shift in fiscal policy (which was why it was so controversial that it led to a government shutdown even though the Democrats control both houses of the legislature as well as the governor's office). The Democrats in the legislature wanted to institute a steep hike in income tax rates, while Governor Corzine insisted on keeping income tax rates frozen while hiking the sales tax -- a very regressive tax -- from 6% to 7%. This was done because Corzine -- who despite his political affiliation has a strong background in finance as the former CEO of Goldman Sachs -- rightly heeded warnings from various experts about a catastrophic increase in out-migration from New Jersey among high-income taxpayers and key industries (notably financial services and pharmaceuticals). The biggest problem New Jersey faces right now is a serious "brain drain" to places like Virginia, North Carolina and Texas.

2. The affordable house law mentioned in this article is imposed on municipalities to prevent them from engaging in the kind of development approval process that has caused so much trouble in the state. In order to attract new development (i.e., ratables) while minimizing the local costs associated with it (in the form of infrastructure, schools, etc.), towns in New Jersey have had a huge incentive to approve office, retail and warehouse development while rejecting any residential development. The result is that the places where people live are usually far away (even outside the state) from where they work and shop, so the result has been an enormous traffic problem that has gotten worse over the years. The new affordable housing rules are seen as a way to prevent this kind of nonsense in the future.

The state where I was born and raised(NJ) and still reside in has become a cesspool of corrupt mobsters and thugs posing as politicians and businessmen. When I was younger the state thrived, we had commerce, low tax burden, steady and broad growth and now after a couple decades - it’s all turned to crap spiraling down the toilet.

The last governor that was worth a red-cent was Tom Kean and since his administration ended, we’ve been flooded with tax & spend liberals. Even Christine “Whitless” Whitman(R) drove the state farther down the drain.

I must be getting old because I catch myself longing for “the good old days”.

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