Report: NJ Close to Dead Last for Economic Competitiveness
The economic outlook is worse for New Jersey than nearly every other state in the country, according to an annual economic competitiveness index released by a conservative think tank.
In the 13th edition of "Rich States, Poor States" released Wednesday by the American Legislative Exchange Council, New Jersey ranks 48th among the states based on 15 factors considered by the organization to be "important state policy variables."
Specifically, New Jersey ranks in the bottom five for its top income and corporate tax rates, along with personal income tax progressivity and the property tax burde. Although the state in 2018 eliminated its estate tax, the report still gave New Jersey the worst possible mark in that category because it still levies an inheritance tax.
"You add that to the unfunded liabilities within their systems and you just see a very toxic business environment," said co-author Jonathan Williams.
Since 2014, the Garden State has ranked 45th or worse in ALEC's index. In 2013, New Jersey earned its best spot, at No. 39. For the 13th straight year, Utah claimed the No. 1 ranking for economic outlook in 2020.
Responding to New Jersey's ranking, Sheila Reynertson, senior policy analyst for New Jersey Policy Perspective, suggested ALEC's report "isn't worth the paper it's printed on."
"A state's tax climate, which this report measures, is not the same thing as a state's business climate," Reynertson said. "When you measure what businesses actually value when choosing where to relocate or expand — strong public schools, a well-educated workforce, and robust transit networks — New Jersey is very competitive."
Reynertson noted New Jersey has a disproportionate number of Fortune 500 companies located within its borders, compared to "more competitive" states in ALEC's index.