By Bob Singer
A whopping 238 cities across the United States sought to be the home of Amazon’s second headquarters, dubbed “HQ2.” Of all city applicants, Newark, New Jersey offered Amazon the largest tax benefits in the country. Regardless of being one of twenty cities to make the final cut, Newark was passed over by Amazon not once, but twice. It speaks volumes that a package of tax incentives totaling $7 billion could not entice Amazon to choose New Jersey.
Our state’s prime geographic location, diverse workforce, state-of-the-art infrastructure, convenient transportation, and best-in-the-nation schools should have made the Garden State an easy sell. The New Jersey Legislature’s successful bipartisan effort to top all other competing tax incentive offers nationwide should have made the Garden State an easy choice. The competition was fierce to court HQ2, and New Jersey was in play.
In the end, New Jersey’s effort to appeal to Amazon was too little, too late. Amazon opted instead to divide and conquer the East Coast, choosing to locate their second and third headquarters across the Hudson in New York City and in Arlington, Virginia. Those selections were made despite the fact that their combined tax incentives were $2 billion shy of those offered by New Jersey.
New York, however, managed to seize defeat from the jaws of victory. Just months after announcing the winners of the competition, Amazon cancelled the project that had been announced for the Long Island City neighborhood of Queens. Their action was a response to extremely vocal protests from some labor unions and local politicians.
Their loss should have been our gain. Newark, a finalist in the initial search, could have been reconsidered as a close and affordable option. Amazon, however, passed Newark over yet again.
Why would Amazon twice reject the best deal? Why would they cast aside billions of dollars in incentives that had already been approved? The simple answer is that New Jersey is generally viewed by the business community as being too unaffordable and too unpredictable.
That was demonstrated clearly during last year’s State Budget debate. Governor Murphy and top Democrats in the Legislature argued publicly over which taxes to raise to support the massive spending increases they proposed. Ultimately, they settled on $1.5 billion of new taxes, with the biggest chunk coming from a new tax surcharge on corporations. They did this while trying to sell New Jersey to Amazon as a good place to do business.
Jeff Bezos, the founder of Amazon and the world’s wealthiest individual, is first and foremost a businessman. His primary concern is his bottom line. The bone our state threw to Amazon simply wasn’t big enough to compensate for our bad habits. The cost and risk of doing business in the Garden State is still viewed as being too high.
New Jersey consistently ranks as having the least business-friendly tax climate in the country. The Tax Foundation’s annual State Business Tax Climate Index breaks that down even further – New Jersey has the 45th worst sales tax, 47th worst corporate tax, 48th worst property tax, and 50th worst individual income tax rates. The Garden State also has the highest average property taxes in the United States.
This comes at a very real price. The extraordinary cost of living is forcing residents young and old to move to more affordable states. New Jersey has the highest rate of outmigration in the United States.
But all hope is not lost. New Jersey’s mounting fiscal challenges are government-centric and can be corrected. It is possible to reverse our State’s spending problems and high cost of government through structural reforms. Senate Republicans have proposed numerous solutions to prioritize the needs of the taxpayer over big government.
We support proposals to rein in the exorbitant pension and health benefits costs for government employees that that are consuming our budgets. If enacted, the proposed reforms would save billions and make New Jersey more affordable for everyone. Those cost-cutting measures, combined with a proposed cap on state spending, could lead to the budget stability and tax predictability that both businesses and families are seeking.
The Garden State has so much to offer. New Jersey is one of the most diverse states in the country. Our public education system is second to none. Our 130 miles of beautiful shoreline make us a popular summertime tourist destination. World renowned cities are easily accessible from all corners of the state. New Jersey has great food and even greater people.
So let’s ensure that New Jersey can be a fantastic place to grow up, raise a family, work, and retire. With a little work, we can make New Jersey a good home for every generation. And when the next Amazon comes around, we can help them to say “yes” to the Garden State.