It goes without saying that New Jersey has its fair share of fiscal and economic problems. The Garden State suffers from high-taxation, over-spending, over-regulation, and heavy borrowing which have stagnated economic growth and employment. While the national Cost of Government Day fell on August 12 in 2009, taxpayers in the Garden State had to work a total of 249 days out of the year to pay for the cost of state government – the second worst ranking in the nation.
According to a new report published by the Mercatus Center at George Mason University, the state’s progressive income tax, rising property taxes, and numerous other taxes have resulted in the gradual erosion of the state’s economic and financial resiliency.
The authors cite 40 years of Keynesian economics, weak legislative spending caps, relaxed rules on the issuance of debt through judicial interpretation, federal aid and state aid, school spending, and reliance on debt among other things as the contributing factors of the state’s current financial woes.
The report offers various solutions for Garden State. Among them, the state should:
– Reintroduce competition to local government
– Cap spending through a constitutional tax and expenditure limit
– Reform tax policy to favor economic growth and stability
– Lower the cost of government to improve services and increase accountability
– Clarify the "education clause" in the state constitution.