How are the tax and other public policies aimed at ensuring New Jersey remains the “quintessential Organized Labor” state working out for ordinary employees and business owners and their families?
Not at all well, as even New Jersey Senate President Steve Sweeney (D-West Deptford Township), a lifelong apologist for compulsory unionism who moonlights as an ironworkers union official, readily admits.
Addressing a crowd of Big Labor operatives and their militant followers on the steps of the Newark City Hall on September 6, union-label Democrat Gov. Phil Murphy exulted that New Jersey is “the quintessential Organized Labor state,” and vowed to keep it that way.
Government union bosses in the Garden State certainly do have plenty to be happy about.
As of last year, they wielded monopoly-bargaining privileges over 62.9% of rank-and-file public servants across New Jersey. That’s far above the national average government-sector union monopoly bargaining density of 37.2%, and higher than in all but three other states. And New Jersey government union chiefs have enjoyed success unsurpassed by Big Labor anywhere else in the country at getting what they want legislatively at the state level.
For example, a $1.7 billion tax hike package rubber-stamped by legislators in Trenton and signed by Murphy in the summer of 2018 at public-sector union bigwigs’ behest hiked state income taxes for many businesses by 28% for the first two years, and by 17% for 2020 and 2021. The state’s top personal income tax rate was permanently raised by 20%, imposed retroactively back to January 1, 2018. A provision requiring many “remote sellers” based in New Jersey to collect sales taxes was designed to rake in roughly $188 million a year from online shoppers.
Long experience shows that tax increases, even when they are sold to the public as budget-balancing measures, rarely if ever enhance a state’s fiscal soundness. And tax hikes certainly haven’t made New Jersey solvent.
Late last month, Sweeney actually suggested to Bloomberg that credit-rating companies like Moody’s and Fitch, which both rate New Jersey 49th in the country (over Big Labor-dominated Illinois only) for fiscal soundness, are “underestimating the severity of the state’s financial strains,” according to journalists Danielle Moran and Elise Young.
Moran and Young directly quoted Sweeney: “We are in worse shape than Illinois. . . . We are not investing in education, we are not investing in the areas we want because all the money is going to [overwhelmingly government union] pensions and health care.”
Bloomberg went on to underscore why Sweeney is justifiably alarmed:
New Jersey’s retirement system had about $82 billion of assets in 2018, only 38% of what it needs to cover checks that are owed in the decades ahead. That’s lower than any other state system in the U.S., according to data compiled by Bloomberg. The state’s obligation for retirees’ health benefits adds another $90.5 billion.
The state’s ability to dig itself out of the hole into which Big Labor politicians and government union bosses have lowered it is further impaired by the fact that residents in their peak-earning years (aged 35-54) are fleeing in droves to escape onerous living costs and taxes. From 2008 to 2018, U.S. Census Bureau data show, the number of New Jerseyans in their peak-earning years plummeted by nearly 300,000, or 11.1%. Meanwhile, the aggregate peak-earning-year population of the 22 states that had Right to Work laws on the books for the entire decade grew by 1.5%.
Murphy may well be right that New Jersey is the “quintessential Organized Labor state,” but is that really something to boast about when the working-age people who can leave are leaving, taking their children with them, and the government pension system is, as Sweeney rightly warns, headed towards “collapse”?
Instead of focusing on how he can hand even more special privileges to already highly favored union officials, why doesn’t Murphy try now to make New Jersey a better place to live and work for the 99.9% or so of its citizens who don’t collect paychecks derived primarily from dues and fees paid by workers under duress?