Taxes, investment, education: How NJ lags behind neighbor states
Gov. Phil Murphy talks about creating an “innovation economy” in the Garden State. A new report finds if that’s going to happen, a number of serious issues must be addressed immediately.
Michele Siekerka, president and CEO of the New Jersey Business and Industry Association, said NJBIA’s Indicators of Innovation report concludes that the Garden State is at a crossroads in its effort to reclaim itself as the Innovation State.
“An innovation state is one that attracts top-tier talent to our post-secondary schools, it has live-work-play communities where people want to gather, and creates eco-systems that people are invested in and give back to," she said. "It means increasing venture capital and it also means targeting industry clusters for growth in particular areas.”
She said the report finds the Garden state is falling behind most other Northeast states in these categories and in order to spur and revitalize our economy we must do a better job of retaining our best and brightest college students.
To do that Siekerka said we lower the cost of doing business and taxes, a large portion of which goes toward funding public schools.
“We need to fix what’s structurally broken. That means fixing our pensions, property taxes, our infrastructure," she said. “We need to pay attention to the pension crisis that we have in the state of New Jersey, especially now as we’re going into a new budget season.”
She said New Jersey must become more affordable .
“If we don’t do that, we have no chance because that future workforce won’t be able to afford to live here. We need to find better ways to drive people to want to invest in New Jersey."
“We are at a crossroads: 2019 is it. This is our last chance. Every day we are hearing stories about businesses that are contemplating leaving the state of New Jersey," she said.
And Millennials along with retirees continue to flee the Garden State.
The report reviews 12 factors in capital, talent and business, and finds New Jersey is ranked 5th out of seven states in the region.
New York is first, followed by Massachusetts, Pennsylvania, Maryland.
The factors in the report include:
New Jersey's venture capital investment in 2017 was $781 million, compared to the $8.97 billion received by Massachusetts and $12.27 billion received by New York.
New Jersey increased its venture capital investment at a lower rate than all seven states in the region between 2004 and 2017.
New Jersey companies received less than $52 million in award obligation for federal research and development funding efforts in 2017, compared to nearly $271 million awarded to Massachusetts. The state also received less funding than Maryland ($124 million), New York ($114 million) and Pennsylvania ($98 million).
In 2018, New Jersey received $157 million in National Science Foundation College/University funding – significantly less than regional competitors New York ($466 million), Massachusetts ($415 million) and Pennsylvania ($253 million).
New Jersey is home to three Top 100 colleges/universities ranked in 2018 by U.S. News & World Report, compared to 10 each in Massachusetts and New York; and six in Pennsylvania.
New Jersey lost a net total of more than 28,000 first-time college students in the fall of 2016, the largest loss in the nation. Pennsylvania had a net gain of nearly 17,000 students that year.
In 2017, New Jersey was 5th out of seven states with 15.6 percent of its population possessing a graduate or professional degree. In comparison, Massachusetts' graduate and professional degree holders represented 19.5 percent of its population.
New Jersey does fare well in the Rate of Entrepreneurs, with 340 adults starting a business for every 100,000 people in the state in 2017. That's second in the region behind New York, which totaled 360 business starters per 100,000 adults.
New Jersey's startup density was 76.1 per 1,000 employer firms in 2017, good for 3rd in the region behind New York (83.3 per 1,000 firms) and Delaware (77 per 1,000 firms).
In 2017, New Jersey ranked fourth in the region with more than 8,600 patents. Massachusetts had more than 15,000 patents and New York had about 14,700 patents.
From 2015 to 2016, New Jersey experienced a 0.44 percent increase in total businesses – which is 6th in the region. Delaware enjoyed a 2.03 percent increase in total businesses.
New Jersey finished last out of seven regional states in NJBIA's 2018 Regional Business Climate analysis, which scores minimum wage, top income tax rate, top corporate tax rate, sales tax rate, property tax paid percentage and unemployment tax rate.