Governor Andrew Cuomo announced on Monday that New York is facing a $2.3 billion budget deficit after just last week he released his $175 billion budget proposal. “The budget we put forward is not supported by the revenues” Cuomo said. Comptroller Thomas DiNapoli referred to the unprecedented deficit as “the most serious revenue shock that the state has faced in many years,” adding that he believes it will “get worse before it gets better”. If you want a crystal ball to see what the future holds for New Jersey under Governor Murphy all you have to do is look at New York.
Cuomo blamed President Trump’s 2017 Tax Cuts and Jobs Act (which he’s known about for 13 months), a December stock market drop and high income earners leaving New York for lower tax jurisdictions. He blamed everything except his own policies. Cuomo eloquently summed up the situation saying that the $2.3 billion drop in revenues is “serious as a heart attack”.
Cuomo said the state cannot increase taxes on the wealthy as a solution (New York already has the 2nd highest tax rate on millionaires) acknowledging “Tax the rich, tax the rich, tax the rich. The rich leave and now what do you do?” Currently 1% of New York’s top income earners provide 46% of the state’s personal tax revenues. Cuomo acknowledged that high-income New Yorkers are already fleeing the state for states with lower tax rates.
This week the Wall Street Journal reported on Florida’s success luring high income earners from high tax states like New York to Florida. Cuomo and DiNapoli said that these high income earners have Accountants and Financial Advisers who have likely recommended they move out of New York.
Cuomo should probably seek treatment for his Trump Derangement Syndrome (which Psychology Today speculates is a legitimate diagnosis). Cuomo said Monday that federal legislation was a deliberate political attack on blue states and designed to benefit GOP controlled regions of the country. “It’s all politics,” said Cuomo. “We are being penalized for being a predominantly Democratic state”.
New York Senate Republican Leader John Flanagan issued a statement Monday saying in-part “Governor Cuomo acknowledged for the first time today that it’s not the weather that is causing New Yorkers to leave – it’s the incredibly high taxes. Now, if only he would take some responsibility for those high taxes, and work with Senate Republicans and others to deliver real relief. Last month, we proposed a “Real Solutions” budget plan that would cut business taxes, energy taxes, income taxes and more, and revitalize our state’s economy. It’s a very good place to start. Economists know that federal tax reforms impact high tax states with high tax policies enacted by Democrats. Governor Cuomo overlooks the fact that New Yorkers were already fleeing for Florida, Arizona, and other states that tax and spend far less than we do before this legislation was enacted”.
Those of us in New Jersey have no doubt that the crisis facing New York is in our immediate future as Governor Murphy and the Democratic legislature are taking us down the same path. New Jersey is already the #1 state that people leave and #1 in foreclosures. While chasing residents from the state Murphy ensured that tourism at the Jersey Shore would also take a hit with his excessive short term rental tax and $15 minimum wage. No doubt the $15 minimum wage (New York also has an unreasonable job killing minimum wage) will force small businesses to close, force layoffs and force jobs and businesses to leave the state. Murphy apparently believes that he can raise taxes on the hard working New Jerseyans and businesses who remain to make up for the tax revenues lost as residents and businesses flee the state.
Rather than making New Jersey affordable and creating jobs and businesses in the state Murphy is focused on increasing taxes, making New Jersey a sanctuary state (thankfully ICE continues to protect New Jerseyans), funding the legal defense of illegal immigrants facing detention or deportation, driver licenses for illegal immigrants (including Real ID compliant driver licenses allowing the recipient to board an airplane), legalized marijuana, a $15 minimum wage (which we know will kill businesses and jobs in the state), defying the Trump Administration, ineffective gun control measures (that did not save the life John Bertram killed while working an overnight shift at an Edison gas station in December), pushing Obamacare (failed legislation that has been ruled unconstitutional by a Federal Court), a health insurance mandate (because the Governor apparently thinks he’s more powerful than Congress), criminal justice reform, restoring voting rights for those on probation or parole, redistricting, subsidizing the horse racing industry , giving Cory Booker an unobstructed path to the White House and destroying tourism at the Jersey Shore.
Murphy calls himself a “pro-growth progressive”. I guess that depends on what he is growing. Is he referring to growing tax rates? A growing number of jobs leaving? Growing numbers of residents leaving? A growing number of people taking their vacations elsewhere? Growing numbers of criminal illegal immigrants in the state? Growing numbers of people crossing bridges to buy marijuana in the state? A growing number of ineffective gun control measures that make residents unsafe but do nothing to keep criminals from obtaining guns?
With so many businesses, jobs and residents leaving the state Murphy seems not to realize that he cannot simply continue to raise taxes on the New Jerseyans who remain to make up the shortfall. New Jersey is quickly approaching the same crisis as New York finds itself in and Murphy appears as oblivious as Cuomo was.
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