Once again, Gov. Christie has given a budget address that fails to lay out a plan to invest in New Jersey’s greatest economic asset – its transportation networks. The governor called the very real Transportation Trust Fund crisis a “politically driven mischaracterization,” but New Jersey’s broken transportation-funding system is not driven by politics, it’s driven by simple mathematics. In July, the state will have no more money to pay for essential capital projects. It’s that simple.
The governor is holding out his proposed fix on transportation, apparently, until he can secure big tax cuts for New Jersey’s wealthiest families. But trading a gas tax hike for the elimination of the estate tax has absolutely no resemblance to “tax fairness.” In fact, it’s just the opposite, because it increases a broad tax that most affects New Jersey’s low-income and middle-class families while doing away with a narrow tax that affects only 4 percent of New Jersey’s wealthiest estates.
Lastly, the governor doubled down on a misleading “study” that business lobbyists released last week on a mythical “exodus” of people and dollars leaving New Jersey due to taxes, particularly the estate tax.
“Their study concluded that 2 million residents and $18 billion in annual income left our State over the last 10 years,” the governor said. “These facts are not debatable. They come directly from internal revenue service statistics, not from the rantings of some left-wing think tank.”
While we appreciate the shout-out from the state’s chief executive, the facts he cites from the business group’s report are indeed debatable, as they are incomplete and lack context.
Consider these facts:
If New Jersey had really “lost” 2 million residents in a decade, its population would have shrunk by almost a quarter. But that’s not what actually happened. In fact, New Jersey’s population actually grew from 8.7 million in 2005 to 8.9 million in 2014. Those numbers come from the US Census, not the so-called “rantings” the governor warns about.
Why the difference? Turns out the big “2 million” headline is missing essential facts. The data show that 2.1 million New Jerseyans departed over that decade, and 2.0 million “New” New Jerseyans moved in – about 1.4 million from other states and about 600,000 immigrants from abroad. This is a drop of just 86,000 over the decade – not even 100,000, never mind one million. Add babies born who stay in New Jersey and you have the increase noted by the Census.
Meanwhile, during the time the governor and these business lobbyists say New Jersey “lost” $18 billion in income, the amount of total income in the state actually grew by $103 billion. And the amount of income that New Jersey supposedly “loses” in any given year due to outmigration represents less than 1 percent of the amount of income that stays in the state – over the decade cited, the amount was $2.5 trillion. To say that any of this necessitates the elimination of New Jersey’s estate tax is a solution in search of a problem.
