By Briana Vannozzi
People are fleeing the Garden State and they’re taking all their wealth with them. Or, are they?
“The mass exodus that’s going on actually doesn’t really exist,” said New Jersey Policy Perspective Senior Policy Analyst Sheila Reynertson.
Reynertson is the author of a new report challenging outmigration theories.
“On average we have a net loss of about 9,000 people per year. That’s nothing new for New Jersey. We are traditionally an outmigration state as are many northeastern states,” she said.
That’s about a tenth of New Jersey’s total population. The reasons people leave are complex, according to the report. Reynertson used IRS data from outmigration states for the last decade, from 2003 to 2014.
“Taxes really aren’t the reason why people are leaving New Jersey. They leaving for job opportunities and for family considerations. If cost of living is a factor it’s usually housing costs or seeking out lower property taxes,” Reynertson said.
“Millionaire migration is infrequent because most millionaires are the working rich. They’re at the peak of their careers and thus they’re reluctant to move away from the place where they have achieved great success,” said Charles Varner of Stanford University.
The report shows two of the top four states where New Jerseyans are migrating are also highly taxed. New York, Pennsylvania, Florida and California make the list. The analysis comes as policy makers are weighing options to reform the state’s inheritance and estate taxes, which opponents argue favor millionaires.
“It’s dangerous to make policy that’s only going to benefit a wealthy few, knowing that they really don’t make their relocation decisions based solely on taxes,” Reynertson said.
“Our study was not about the movement of population, it was about the study of the movement of the outflow of money. So now the 2 million who left regardless of that fact that 2 million may have came in behind them — $18 billion left with the 2 million. $18 billion in net adjusted gross income regardless of who came in behind,” said NJBIA President and CEO Michele Siekerka.
New Jersey Business and Industry Association put out its own report recently. The president and CEO sees deep flaws with the think tank’s analysis. Siekerka says two-thirds of her members plan to leave the state for retirement.
“In particular I’d like to draw attention to 2013 where New Jersey lost $3 billion in net adjusted gross income in one year alone,” she said.
“The number of people who make over $500,000 per year has grown by 89 percent in the last decade. We are growing not only in our population but the number of households who are doing very well,” Reynertson said.
Whether the wealth migration is an exodus or a trickle, few analysts will argue the cost of living in New Jersey is still too high. And no matter how you look at it, that’s dollars down the drain.