Small States, Lost Income
Duncan Currie tells a tale of economic happenings in my childhood state of New Jersey that should ring familiar to Rhode Islanders:
Hughes, Seneca, and Irving estimated that, between 2000 and 2005, net domestic out-migration cost the state a total of $7.9 billion in adjusted gross income. “Although this loss is relatively small–3.3 percent of total adjusted gross income in 2005–it is a permanent loss that will persist (or increase) each year unless net out-migration is reduced or eliminated,” they wrote. …
One need not be a demography expert to understand why New Jersey is hemorrhaging human capital. According to according to state rankings compiled by the Tax Foundation, it now has the highest state and local tax burden, the highest per capita property taxes, and the worst tax climate for business. The Pacific Research Institute’s latest U.S. Economic Freedom Index says that only two states (Rhode Island and New York) offer less economic freedom. The 2009 State Economic Outlook Index, co-authored by legendary economist Arthur Laffer and published by the American Legislative Exchange Council, ranks New Jersey 46th. Democratic governor Jon Corzine recently suspended property-tax rebates for most New Jerseyans and raised the state’s upper individual income-tax rates to help close a yawning budget gap. New Jersey’s uppermost rate (10.75 percent) is now higher than California’s (10.55 percent).
Readers will recognize the measure of economic health as one that I’ve been tracking, in our state, for a couple of years. The dark topic aside, it’s nice to see my concern about lost AGI echoed by real scholars — especially after the unions’ favorite analyst (and regular Projo opinion-page contributor), Tom Sgouros, called such a measurement “farcical.” I’ll concede that, when it comes to that particular adjective, he may be an expert.
Justin,
At least New Jersey’s uppermost rate (10.75 percent) is not as high as Hawaii’s uppermost rate (11 percent)raised ny Gov. Linda Lingle (R).
$1 million to $10 million houses are still selling very well in Hawaii.
I’ve been asking Tom Sgouros on RIFuture why RI is in the dire financial situation it is in for approximately the past two months.
He swore up and down that our tax burden is average, said something about us having too many roads, and then he told me to buy his book.
I’m concerned now, does it make me anti-intellectual if I don’t?
Plus, it doesn’t matter if RI is losing population, it’s the non-taxing paying population. It’s all those multi-millionaires that just love Rhode Island that are sticking around and fueling our economy.
Hey Pat, Tom, is that about right? Did I recite that talking point correctly?
Yeah, just like Crowley tells us, people don’t act in their very own, up close and personal financial interest.
That’s why teachers never strike or work to rule over money, but instead put the best interests of children ahead of all. Just like the teachers unions that give them their marching orders.
And why well-off people with a choice of taxable residency increasingly choose Rhode Island, so that they can help out this state by paying higher taxes.
And why businesses are flocking to set up shop in Rhode Island, better to make less profit, or even show a loss, if it’ll help pay for that $7 billion dollar unfunded pension liability that the General Assembly has rung up.
Yep, without that world of financial altruism that the “progressives” tell us exists in Rhode Island, well, this state would be in a world of hurt, wouldn’t it?
Forget the population loss and that whole tax bracket analysis for a moment, I don’t think these “progressives” really have any idea how many bright, hard-working people would otherwise come to RI if not for our sucky political/economic climate, and that opportunity loss is not something any of our state statistics are going to reflect.
I can’t tell you how many young professionals from the Boston area have told me that they love Providence and would consider moving there if not for all of our politically-created problems. It is widely known as the corrupt, overtaxed hell-hole of New England.
If anyone is interested I can to mail a copy of the newspaper ad cut out of the local newspaper for the mansion of the Hawaii ex-territorial Governor’s historic 40 room 21,407 interior sq. ft. palatial mansion with 6 bedroom suites, 9 full bathrooms, 2 full kitchens, 6,452 Sq. ft. cellar, servants wing, 2,476 sq. ft. theater; the grand proportions of the drawing room, dining room, library, foyer, loggia and portico defy description. Other rooms include a vestibule, breakfast room with solarium, flower room, lady’s powder room, men’s smoking room, sewing room, trunk room, house keeper’s office and butler’s pantry. Notable features include a marble fountain, a grand stair case, cedar-lined closets and storage cabinets, an elevator, and a spectacular swimming pool on 10 acres of garden landscaped grounds with sweeping vistas of the Pacific ocean, white sand beaches, polo grounds, mountains and sunsets. Property interior and exterior has been restored over the past two decades and is in above average condition. In the City and County of Honolulu on Island of Oahu realtor asking price for property (“fee simple” (FS) meaning you own land below property) is $6.5 million with the historic designation owner occupied estimated yearly property tax would be $100.00. 11% max Hawaii State income tax why worry! State of Hawaii has regained the number 1 spot in the nation for highest property prices and the number 1 spot in nation for highest state income taxes but in most places there are no winter heating bills below 3,000 feet because average daily temperature is at least 77 degrees 365 days of the year. However, property taxes are more livable than on the mainland and GET (sales tax) is 4.5% on all transactions. For those in RI who think moving to Florida or any other state saves you… Read more »
Hey Ragin,
For your information, the NEA teachers in Hawaii voted and ratified their contract to accept Gov. Linda Lingle (R), Department of Education Administration recommendation of 17 furlough days for teachers on 10 month-month contract and 21 days for teachers on 12-month contract for the next two years to help balance the State of Hawaii budget deficit.
The furloughs amount to a 7.5 per cent pay cut and will shut down public school system in Hawaii for 17 Fridays this year.
Parents are filing a federal class action law suit against the governor and DOE to block furloughs because of irreparable educational harm to special needs students on federal IEP’s which are based on regular school year.
Hawaii state employees are voting and ratifying their contract for 24 furlough days each of the next two years to also help balance the budget deficit.
Don’t forget, Hawaii is one of the most unionized state in the nation!
State of Hawaii enacts a two year state fiscal budget which at current estimates will be $1B deficit ending FY-2011 if no action is currently taken.
Current Governor Linda Lingle (R) is lame duck.
When did this blog get re-named Hawaii Rising? Can I put a commenter on the “do not call” list? I don’t really care what a state 5,000 miles away does.
“Yep, without that world of financial altruism that the “progressives” tell us exists in Rhode Island, well, this state would be in a world of hurt, wouldn’t it?”
… um, not to be excessively picky, Ragin’, I think there’s something wrong with the verb tense of that last sentence.