FY2025 Budget: Our Status Quo Governor Takes Care of His Government Union Pals While Leaving His State with an Unsustainable Budget
July 8, 2024CNBC Rankings Confirm NJ Is a Lousy Place To Do Business under Gov. Murphy — And It’s Getting Worse
July 18, 2024The Wall Street Journal reported on the continuing exodus of people and money from big-government, high-tax states — including New Jersey — to smaller-government, lower-tax states. Here is the IRS data for gains and losses in net Adjusted Gross Income (AGI) for 2022:
Top Losers:
- California -$23.8 billlion
- New York -$14.2 billion
- Illinois -$9.8 billion
- New Jersey -$5.3 billion
- Massachusetts: -$3.9 billion
Top Gainers:
- Florida +$36 billion
- Texas +$10.1 billion
- South Carolina +$4.8 billion
- Tennessee +$4.7 billion
- North Carolina +$4.6 billion
Notice a pattern? The top five losers are all progressive, “blue” states with big government, powerful government unions, and high taxes. The top five gainers are southeastern, “red” states with smaller government, less powerful government unions, and lower taxes.
And remember that this loss of AGI only measures one year’s worth of exodus, but that money will likely remain out of the state forever.
The Journal notes that the exodus from progressive states accelerated during the pandemic and has continued. That includes New Jersey, where net outflow of AGI set a record in 2022. This acceleration was also true for the gainers: Florida, Texas, South Carolina, and Tennessee all gained more AGI in 2022 than they did in 2019, with Florida up 200% and Texas up 150%.
This exodus of people and wealth underscores the folly of Gov. Murphy’s most recent FY2025 budget. Murphy increased government spending to another record level and raised taxes again to do it. It is true that the budget contained some property-tax relief for seniors, but those savings will be eroded by New Jersey’s high and rising tax burden and cost of living. Gov. Christie’s 2% property-tax cap has been lifted, so New Jersey’s highest-in-the-nation property taxes will climb.
Unsustainable spending, a large structural budget deficit, and a dwindling rainy day fund all demand more tax revenue, but New Jersey’s policies under Murphy are driving taxpayers and their money out of the state.
Our status quo governor has ramped up spending to take care of his government union pals, but New Jersey taxpayers are voting with their feet and leaving the state. What a mess.