New Jersey needs a growing population, a strong economy, and a competitive tax structure if it is to compete with New York, Pennsylvania, and other states. Yet New Jersey’s current high-tax, antibusiness, and special-interest-dominated status quo is not generating sufficient economic growth to retain its citizens or meet the state’s enormous future liabilities.
In its 2017 report, the Tax Foundation ranked New Jersey as the worst tax climate in the country—for the third straight year. The state ranked last for property taxes, in the bottom three for income taxes, and in the bottom 10 for sales and corporate taxes.
New Jersey’s pension and benefit crisis threatens the future of the state. New Jersey’s unfunded liabilities for public pensions and benefits amount to at least $202 billion, almost six times the state’s $35 billion annual budget.
The modern era of New Jersey politics has been one continuous saga of the New Jersey Education Association (NJEA)—oft cited as the most powerful political force in the state—wielding extraordinary influence to serve its own interests.
According to official reports, the New Jersey Education Association is by far the biggest political spender in New Jersey. But due to legal loopholes and clever disguises, it spends more than 10 times the reported amounts, making it the most powerful political force in the state.
With a pension crisis looming for New Jersey, AEI Adjunct Scholar Mike Lilley claims that the crisis may become a permanent fixture of life in the Garden State if the New Jersey Education Association can enshrine pensions in the state constitution.
The fact is that middle-class New Jerseyans are footing the hefty bill for the NJEA’s “one-percenters.” Maybe that helps explain why New Jersey teachers pay the third-highest dues in the country and New Jersey taxpayers pay the highest property taxes.
New Jersey’s pension system crisis stems from the New Jersey Education Association keeping teachers’ pensions at the state level and influencing pension legislation. Now taxpayers face the $95 billion consequences.