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TagsBY JOE TYRRELL
NEWJERSEYNEWSROOM.COM
New Jerseyans not only pay high state and local taxes, they pay more to other states than almost anyone else in the nation.
The latest analysis of cumulative state and local taxes by the conservative Tax Foundation again puts New Jersey at the top of the heap in terms of cumulative state and local taxes as a proportion of per-capita income.
But in real dollars, the foundation's calculations show that Connecticut and New York residents pay higher tax bills in their states and towns.
The foundation's methodology also penalizes New Jersey by "shifting" some tax bills from the states that collect them to the hometowns of those who pay them.
In a statement describing the report's findings, authors Mark Robyn and Gerald Prante said they counted taxes paid in New York City by suburban commuters not as New York revenues, but against the "tax burden" of their home states.
Similarly, wealthy residents who own second homes elsewhere -- a significant number of New Jerseyans -- see those property taxes counted here by the Tax Foundation.
In tables attached to the report, drawn from government and industry sources, the Tax Foundation estimates New Jersey residents paid a per-capita average tax of $4,814 to the state and municipalities in 2009. It estimates they paid another $1,937 per-capita to other jurisdictions.
Only residents of wealthy Connecticut paid more in both categories, an estimated $5,151 per-capita internally and $2,106 externally. Commuters from both states face out-of-state taxes.
New Yorkers ranked behind second Connecticut in state and local tax bills, $4,914, but like almost all other states paid far less to other jurisdictions, according to the report.
Only Wyoming was close to Connecticut and New Jersey in out-of-state taxes, at $1,873 per capita. Wyoming is the state with the fewest residents and a domestic economy barely one-third that of the District of Columbia.
In most places, the Tax Foundation estimated residents paid about $1,100 in out-of-state taxes and fees. The New Jersey figure is about 2½ times the amount paid by residents of poverty-stricken Mississippi, according to the report.
As usual, much of the attention on the report has focused on the foundation's headline of rankings by per-capita total taxes. For the third year in a row, it found New Jerseyans as paying the highest percentage of their income as taxes, 12.2 percent.
The foundation estimated that during 2009, New Jerseyans' tax bills dropped to a per-capita average of $6,751, while income fell to $55,303. The per-capita income estimate kept New Jersey in second place behind Connecticut by that measurement.
"It's no surprise to New Jerseyans that their taxes are sky high," NBC Philadelphia said.
Aside from reassigning taxes on out-of-state workers, though, the Tax Foundation also gives a major break to major tourist destinations. Robyn and Prante said that, for example, they count hotel and restaurant taxes, car rental fees and other surcharges paid by visitors to Disney World and Las Vegas against the tourists' home state.
That artificially lowers the reported tax burden of tourism-dependent Florida and Nevada, two states mauled by the Great Recession. If the foundation breaks down the findings by county, though, the approach could help the images of Atlantic City and other Jersey Shore communities.
Although the report includes local as well as state taxes, many reports have focused on Gov. Chris Christie's efforts to hold the line on state spending while reducing aid to municipalities and school districts. The effects of that shift remain to be seen, since the current report covers the last year of former Gov. Jon Corzine's administration.
During Corzine's last year in office, New Jersey's tax burden fell by 3.7 percent, according to the foundation. But most of that came from external taxes, indicating drops in out-of-state jobs, travel and purchases.
New Jersey incomes fell almost as much, 3.1 percent, as both personal and government budgets and investments bore the brunt of Wall Street's financial meltdown.
Even with the reductions, though, the foundation calculates New Jerseyans paid 12.2 percent of per-capita income in taxes during 2009. That compares to 9.8 percent in 50th ranked Alaska, although taxes rose there in 2009 and Gov. Sarah Palin unexpectedly quit in the midst of a fiscal crisis that proved to be short-term.
Looking at the New Jersey rate, a Christie spokesman was quick to blame "the failed model of past administrations and legislatures" in a report in The Record.
Joe Tyrrell may be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
As usual, states on the left and right extremes in terms of taxation and regulations are simply not functional (like NJ and Florida). What is needed are moderate leaders with a common sense balance between government action and invidual freedoms.