Daily Archives: February 9, 2010

NJPP: Taxes not to blame for NJ wealth exodus

Last week the New Jersey Chamber of Commerce and the Community Foundation of New Jersey released a report they commissioned from the Center on Wealth and Philanthropy at Boston College. This report ties the wealth of households to migration patterns in and out of the state.

It finds between 2004 and 2008, there was a moderate increase in the number of wealthy households moving out of New Jersey and a decline in the number moving in. The net effect of this, according to the report, is a substantial decrease in household wealth and charitable capacity.

The business community and various politicians are using this study to make the claim–yet again–that this exodus of wealth is a reaction to taxes such as New Jersey’s millionaires’ tax. They make this claim despite the fact that the analysis doesn’t include taxes as a variable and the report doesn’t mention them–except to say that only 6 percent of the wealthy people moving out have incomes over $500,000 (the starting point of New Jersey’s highest tax bracket).

The report looks at wealth (real estate, stocks, bonds, 401ks and vehicles) because it says investable assets are a more important determinant of charitable giving than income. But the study is being used as proof that there is a rush of wealth AND income out of New Jersey.

To the contrary, the number of high income households in the state has increased sharply during this period.

Actual tax return data from the New Jersey Department of the Treasury confirm that the number of tax returns with incomes of $500,000 and above has been growing. The current recession may tell a different story in more recent years, but in 2007 (the most recent data available), 48,500 tax returns were filed with incomes of $500,000 or more. This is nearly twice the number (25,500) filed in 2002. In each year since 2002, the number of these high income returns has grown. Their collective income in 2007 was $76.9 billion and they paid $4.6 billion in taxes to the state. Although their income was taxed at a top marginal rate of 8.97 percent, they paid an effective rate of 6 percent ($4.6 billion/$76.9 billion).

This report only looked at a ten year period–and that period just happened to be the decade when New Jersey increased income taxes on the state’s wealthiest residents. But what if the report looked at a twenty year period? It’s possible the data would show the same trend–younger people moving in have higher incomes and less wealth; older people moving out have more wealth and lower annual incomes.

What this study might suggest is that New Jersey doesn’t import wealthy people; it creates them. The report finds that the people moving to New Jersey are younger, earn higher incomes, and are more frequently employed than the wealthy people leaving. It makes perfect sense that younger, mid-career people would have less wealth because their retirement accounts would be small and their houses are probably mortgaged.

In contrast, the wealthy people leaving tend to be older, are more commonly retired or widowed and have more wealth. It’s likely that these older retired people are taking with them retirement and investment accounts and the cashed out untaxed capital gains from houses that have appreciated in value many times over the original purchase price.

New Jersey is, quite frankly, a rich state. We all know that.

In 2007, we had the second highest median household income in the country (after Maryland). We ranked third after the District of Columbia and Connecticut in per capita personal income. And in the same year, New Jersey and Maryland tied as the states having the highest percentage of households (7.1 percent) with at least $1 million in assets. These factors are unlikely to change overnight.

BUDGET SERIES

Understanding the state budget and its underpinnings are critical to any policy decision that will be made in this state. State budget decisions affect the lives of every one of the 8.7 million people living in New Jersey. They influence how much we pay in income and property taxes; the condition of our schools and healthcare facilities; the access we have to job opportunities in the public and private sectors; and the sense of security we have in our communities.

Starting next week, NJPP’s Monday Minute will begin a series devoted to issues surrounding the New Jersey state budget. Our plan is to start with a discussion of the state’s current and long term structural deficit; the taxes that support state and local spending; and simple analyses of the programs that these taxes support. Each week we will focus on something new.


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Filed under median household income, New Jersey Policy Perspective, NJ Chamber of Commerce, Taxes, wealth exodus

Middletown Board of Ed Issues Statement Regarding Lincroft Sports Complex

The war of words over who is responsible for the placement of the proposed Lincroft Sports Complex at West Front Street Park has just gone nuclear.

This past week, the Middletown Board of Education came under attack and has been made to look like the “bad guy” for its reluctance to allow the installation of two artificial turf fields on Board of Ed property.

Last week at the February 1st Township Workshop meeting, Lincroft residents packed the meeting room to voice their displeasure at the Township Committee for not notifying them of the proposed Sports Complex that would drastically impact their quality of life.

Mayor Scharfenberger immediately pointed the finger of blame towards the BOE for not allowing the township to construct this sports complex on the grounds of Thompson Middle School and another field at Thorne Middle School. By doing so, Scharfenberger deflected the residents anger away from himself and others on the Township Committee and turned it unjustly onto the BOE.

This has outraged the BOE because Scharfenberger falsely accused the BOE of not negotiating in good faith with the Township.
Due to the misrepresentation of the facts, the Board of Education tonight released the following statement:
MIDDLETOWN TOWNSHIP BOARD OF EDUCATION

59 Tindall Road, Middletown, New Jersey 07748

TEL(732)671-3850 FAX(732)957-1846


Laura Agin, President – Dawn Diorio, Vice-President

February 8, 2010

To Whom It May Concern:

Recently members of the Middletown Board of Education and I have been asked to clarify our position regarding discussions which took place between the Township and the BOE regarding the proposed construction of artificial turf fields on school property. It has been suggested that the BOE was not willing to work with the Township on this shared project, and I can assure you that this is not the case.

In the spring of 2009 the Township met with district administration regarding construction of artificial turf fields at the Thompson and Thorne Middle Schools. Given the district's experience and the BOE's involvement with turf field construction in the past, administration requested that a presentation be given to the Board directly at a public BOE meeting. Following a preliminary meeting with representatives from the Township, the district administration and BOE officers, the township finally agreed to present at a public forum. Shortly after this presentation, the Board met and directed our lawyer to write to the Township expressing our interest in pursuing this project and asking for information the Board felt they required to make an informed decision. Items requested included Rights of Usage, Insurance and Liability, Timing Issues, Cost Over-Runs Infrastructure Construction, Drainage and Wetlands Issues, Lighting, Maintenance, etc. At the same time, the BOE requested a feasibility study to determine the viability of placement of these fields at these locations as well as whether this project could be completed with available funds.

In late August having received only minimal information from the Township clarifying these important issues, the BOE Facilities Committee met with the Township to try and get enough information to make an informed decision regarding this project. This meeting was held on September 10 with representatives of the Board and the Township. The Township reiterated that it was their intent to build three artificial turf fields: a Croydon Hall upgrade, "turf and a fence" at Thorne Middle School, and a full sports complex, similar to Croydon Hall, at Thompson Middle School. It must be noted that this was the first time the Board was advised of the anticipated scope of the Thompson project and its primary use for Pop Warner football.

At the September 16 BOE Workshop Meeting, the Board discussed the viability of moving forward with these projects. It was determined that Thorne was not a viable location as a result of wetland concerns and security issues relative to its proximity to Harmony Elementary School. The Board also concluded that the Thompson location was not a desirable location for a full stadium complex we believe there is not enough space available for a field, track, bleachers, snack stands parking, etc. to accommodate the types of activities the Township intended for this location Additionally, usage is a major concern, as Thompson students utilize this field for soccer, field hockey and cross country (practices and games) during the fall season, the very season Pop Warner football would be seeking both practice and game time.

After careful consideration, the Board suggested the Nut Swamp field as an alternative for a sports complex This property is owned by the BOE but currently used primarily for Township recreation activities. We believe there is ample space at this location for its intended use, and its proximity to Normandy Park would be a complement to Township recreational facilities. This was communicated via email to the Township on September 16, adding that any further discussion of this location would include community input from affected neighborhoods. We were advised by the Township on September 28 that they were not interested in pursuing the Nut Swamp location and, if only two fields were going to be constructed, it would make sense to have them both on Township property since two locations were available. This concluded discussions between the Township and the BOE regarding turf field construction.

Lastly members of the community have asked if the BOE would be willing to allow Pop Warner to use high school fields, particularly MHSS. Neither the Township nor the Pop Warner organization have ever formally approached the district regarding field usage for that purpose. Our concerns with that type of use include field maintenance and security and costs associated with such usage Additionally during Pop Warner football season, the BOE fields are used consistently for football, soccer, field hockey and the band, both for practice and games. Our limited use snack bars are dedicated to our parent organizations for their fundraising efforts.

I hope this clarifies the Middletown BOE's position and answers the many questions and concerns that have risen over this important issue. The BOE works collaboratively with our administration and board attorney to ensure that the interests of the school district, the students and the taxpayers are considered and protected. I genuinely hope that whatever further steps the Township takes regarding the construction of turf fields includes input from the community at large.

I have included a timeline as well as pertinent documentation for your review.

Laura Agin, President
Middletown Board of Education
If you click onto the above hyperlink you will be able to read the complete document that the Middletown Board of Education sent out. The document includes a timeline with supporting email correspondences between the Board of Ed and Township representatives.

Note: Sorry for the formatting issue, it happens sometime check out the full statement >>> Here

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Filed under artificial turf fields, Lincroft, Middletown Board of Education, Middletown Township Committee, sports complex