Regina Egea was Gov. Chris Christie’s third chief of staff. She has founded Garden State Initiatives, which held a symposium Wednesday morning. We asked her what she wants her group to develop into.
“A really credible think thank to address some of the opportunities that we have in New Jersey to improve our economy and improve our policies for the betterment of frankly all the businesses and the residents of the state,” Egea said. “We’re pro-growth.”
About 60 people attended, including U.S. Senate candidate Bob Hugin, Christie confidante Bill Palatucci and former state treasurer Ford Scudder.
The author of the group’s new report on state competitiveness briefed them on his findings.
“The takeaway is that New Jersey’s business tax climate is not as competitive as it could be. Certain states like Ohio and North Carolina have really done a lot to lower business taxes over the recent years,” said Andrew Phillips, partner and principle at Ernst and Young in their Quantitative Economics and Statistics, or Quest, division.
There were two panels. Arthur Laffer, the famous supply-side economist from the Reagan era, joined via Skype from Nashville, and compared New Jersey to a drug addict.
“When you look at this thing, New Jersey has become addicted to government spending, forced union labor regulations in the state, taxes as we’ve mentioned time and time again and the regulations. Those are killers. You can’t tax an economy into prosperity, or can a person spend themselves into wealth. It just doesn’t happen,” Laffer said.
The debate focused on what creates economic growth and whether lower taxes are essential to it.
“Look, I am a proponent of progressive taxation, but I think it has to be done mostly at the federal level. The smaller the geographic unit, the more risk there is of out migration,” Tom Byrne, a former member of the State Investment Council and the managing director at Byrne Asset Management.
State senator Steve Oroho said high taxes are driving the rich away. Assembly majority leader Lou Greenwald said it’s the property tax doing most of that.
“We are the state with the largest out migration of residents in the country. We know that the number one state they go to, ironically, is not Florida, they go to Pennsylvania first,” said Greenwald.
Dan Geltrude, a CPA offered this, “At least once a week, if not more, I have meetings with clients about how to leave New Jersey. That’s actually part of my job.”
Hanging in the air unspoken was Gov. Phil Murphy’s proposed tax hike on incomes over one million dollars to pay for schools, pensions and transit.
“It doesn’t seem like taxes are the solution to that. I think we’ve got to revamp the way we do things, do it more efficiently, get more out of our spending. I think tax increases, the issue is not New Jersey not being taxed enough, it’s New Jersey being taxed too much,” Hugin said.
There are those like Murphy who believe the state needs greater investment, and there are those like most of the panelists at this symposium who warn against higher taxes. The issue got a good airing out this morning.