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.