NJ vs. 6 Other States — Where We Rank For Business Climate
New Jersey ranks dead last among seven states in an analysis that looks at key metrics involved in the cost of doing business.
The 2023 Business Climate Analysis from the New Jersey Business & Industry Association ranks the Garden State last overall, behind New York, Massachusetts, Connecticut, Pennsylvania, Delaware, and Maryland.
"Unfortunately, we've been at the bottom of these rankings for quite some time," said Kyle Sullender, NJBIA's director of economic policy research.
For the analysis, NJBIA tracked six business costs and metrics: minimum wage rate, top income tax rate, top corporate tax rate, sales tax rate, property taxes as a percentage of personal income, and the maximum unemployment insurance tax contribution per employee.
Although it's not shown in the report, New Jersey not only records the highest corporate tax rate (11.5%) among states in the region, it's the highest rate in the country.
At 4.8%, property tax paid as a percentage of personal income is higher here than in any other state analyzed by the report.
"We do believe that many of our policymakers are aware of this outlier status and want to improve our standing in these critical areas in some way," said Michele Siekerka, NJBIA president and CEO. "As we approach the FY24 budget season, we encourage them to seek — and act upon — comprehensive solutions and reforms to greatly improve our business climate."
Gov. Phil Murphy has indicated plans to let the 2.5% corporate business tax surcharge sunset at the end of 2023. The added tax was put in place in 2018 for businesses earning more than $1 million annually.
Business groups such as NJBIA are in favor of the tax sunset. Progressive think tank New Jersey Policy Perspective wants the surcharge to continue beyond 2023, noting that without it the state would miss out on hundreds of millions of dollars in annual revenue.
"There are things that we can do on the margins, that are not dramatic actions, that would bring us more in line with our regional competitors or put us in a more advantageous position," Sullender said.
Every state in the analysis was given a score of 1 through 7 for each metric, depending on where it ranked among the states. New Jersey's overall score (11) was the weakest for the fifth consecutive year.
Maryland scored the best this year at 34, followed by Delaware (31).