Using data from the Census Bureau and the IRS, researchers found that between 2002 and 2006, New Jersey lost 231,565 more people than it gained from other states. This flight is starting to have "significant economic and fiscal consequences," they concluded. Researchers estimated a loss of $7.9 billion in personal income, reduced employment, reduced consumer spending, lower gross state product, and lost state tax revenue.
The extent of this problem was confirmed in a 2007 report issued by the American Legislative Exchange Council. It ranked New Jersey 47th in the nation in domestic migration from 1997 to 2006. During this period, 409,409 more residents moved from New Jersey than into it from another state. New Jersey's largest losses occurred in 2005 (56,989) and 2006 (72,527).
New Jersey's business climate is exacerbating this problem.
In its annual survey of state business tax climates, the Washington-based Tax Foundation ranked New Jersey next to last for fiscal 2008. The Tax Foundation noted that "states with more competitive tax systems . . . are best suited to generate economic growth."
Having what some consider one of the worst business tax climates in the country harms New Jersey's economic competitiveness - its ability to attract and retain jobs. That has to change. A negative business tax climate diminishes employment opportunities both short-term and long-term.
As the stewards of New Jersey's future, policymakers need to develop an agenda that enables the state to develop a strong and vibrant economy that provides jobs and economic opportunities.
To do so, policymakers should avoid adopting policies that would further damage the business climate. One example is paid family leave, which would require businesses of all sizes to provide workers with up to six additional weeks of paid leave. Adopting paid family leave would be a toxic shock to an already shaky business climate.
Also, policymakers should commit to achieving fiscal reform in state and local government, including a rigorous approach to controlling government spending.
In the last two years, the Chamber of Commerce Southern New Jersey's Council on Responsible Government Spending has proposed 77 recommendations that could save state government $1 billion. These recommendations provide a road map of how operational efficiencies common in the private sector can be applied to state government. While some of our ideas are being implemented, still more needs to be done.
Everyone has a big stake in the state's business climate. Everyone has a greater promise of opportunity when jobs abound.
New Jersey residents are voting with their feet when they leave the state, pursuing opportunities for a better life elsewhere. The Legislature must focus on stemming this exodus and making the state's business climate competitive again.
Debra P. DiLorenzo is president and chief executive officer of the Chamber of Commerce Southern New Jersey in Voorhees.
