A new report finds NJ has the worst business climate in the region by far
A new report finds New Jersey has the worst business climate in the region.
Michele Siekerka, the president and CEO of the New Jersey Business and Industry Association, said for the fourth year in a row, the Garden State ranks last behind Massachusetts, Connecticut, New York, Pennsylvania, Maryland and Delaware when it comes to business affordability.
Taxes, taxes, taxes
“We define affordability by looking at things like taxes, property tax, income tax, corporate business tax,” she said.
She noted the analysis also looked at and compared the minimum wage rates, the state sales tax rates and the national unemployment insurance tax ranking of Jersey and the other states in the region.
Siekerka said New Jersey lawmakers continue to insist they are looking for ways to increase affordability.
New Jersey has the top corporate tax rate, 11.5%, in the nation.
She said for each of the metrics considered, the analysis assigns a score between 1 (least competitive) and 7 (most competitive), so the lower the score, the worse the state is ranked.
“New Jersey comes out with the ranking of number 13, and the next in line, which is Maryland, comes in at 21. I mean, think of that difference right there,” she said.
“We’re not just an outlier but we’re an extreme outlier when it comes to costs here in New Jersey, and in particular we’re talking about taxes.”
The state with the best, highest ranking in the region, 34, is Delaware.
Siekerka pointed out in 2018, New Jersey’s corporate tax rate went from 9% to 11.5% in what was termed a “temporary increase.” It was originally scheduled to phase down to 10.5% in 2020 and back to 9% in 2021, but instead the 2.5 percentage point surcharge was extended by the Legislature in 2020 until the end of 2023.
Crushing small businesses
She said having this kind of toxic tax environment is hurting everybody but it’s especially punitive for small businesses that have been decimated through COVID.
“Every dollar that they’re putting out toward any type of tax, income tax, corporate tax, property tax, is a dollar they’re not reinvesting in themselves, or able to invest in their workforce,” she said.
She noted that’s especially difficult with the hiring and retention crisis that continues to drag on.