Ailing States Retirees May Want to Avoid

From U.S. News and World Report

If you're nearing retirement or are considering relocating to a different state any time in the next several years, you need to do some careful thinking about how the recession and housing downturn have affected the finances of different states. The National Governors Association says it will take a decade for states to recover. Many states have had little choice but to raise taxes and fees in the teeth of the recession, and further increases are likely. Even so, public services will decrease, especially after one-time funds from the federal stimulus program stop flowing to the states.

These financial dilemmas will affect the quality of residents' lives, and could change your thinking about the place you'd like to spend your retirement years.

The Pew Center for the States recently released a study listing what it judged to be the country's 10 most imperiled states:

    * California
    * Arizona
    * Rhode Island
    * Michigan
    * Oregon
    * Nevada
    * Florida
    * New Jersey
    * Illinois
    * Wisconsin

California is the unfortunate poster child for states that have been effectively bankrupted during the past few years. Pew ranked all 50 states using six factors that it said had played major roles in California's spiraling financial decline: 1) high mortgage foreclosure rates; 2) worsening unemployment; 3) loss of state revenues; 4) the percentage size of the state's budget shortfall; 5) a legislative supermajority requirement that makes it hard to enact tax and budget cuts, and 6) a Pew ranking of how poorly each state managed its money. California had the high score of 30—a bad thing in this ranking—and scores in the other nine states ranged from 28 in Arizona down to 22 in Wisconsin. Pew noted, however, that many other states also were hurting and, in fact, the national average state score was 17.

While Pew focused on the more troubled states, it's worth noting the 10 states that had the lowest, or best, scores on its ranking system:

    * Wyoming (score: 6)
    * Iowa (score: 7)
    * Nebraska (score: 7)
    * Montana (score: 9)
    * North Dakota (score: 9)
    * Texas (score: 9)
    * Pennsylvania (score: 11)
    * Utah (score: 11)
    * South Dakota (score: 12)
    * West Virginia (score: 12)

Of these states, Wyoming, Texas, and South Dakota have no state income tax. RetirementLiving.com has a detailed look at the various taxes levied by each state. To help provide a rough guide of how far your dollars will go in other places, SalaryExpert.com has a free set of city cost-of-living reports that include comparisons with other cities.

There are, of course, many other reasons why a location might or might not be attractive. But it can't hurt to see which places might be most friendly to your finances.

NJ: 400,000 people flee since 2000

Christie inherits a state that's in arguably the worst financial condition in its 233- year history. Last year's $7 billion shortfall, closed with stimulus dollars and tax hikes, has resurfaced at an even larger $8 billion for 2010. Residents face crippling property taxes (an average of $7,000 per capita), high income and sales taxes, $45 billion in debt and the net loss of 400,000 people since 2000.

From the NY Post

Pharma's Decline In New Jersey

In 1990, 20 percent of the nation’s pharmaceutical jobs were in New Jersey. It now has 13 percent of them. From 2007 to 2008, the state lost 10 percent of its jobs in the high-paying industry.

Now a wave of pharmaceutical consolidations involving New Jersey firms, including Pfizer Inc.’s purchase of Wyeth in Madison and Merck & Co. Inc.’s purchase of Schering-Plough Corp., headquartered in Kenilworth, is likely to cost the state even more of those jobs.

N.J. has been hit hard by the recession

Abandoning the state? Here's your roadmap

Link To Article

"Financial resources are yet another of the critical ingredients that turn policy into results that matter in the lives of a state's population, from environmental protection to education, health and transportation," writes the Pew Center on the States in Grading the States 2008.

"To gauge how well a state is functioning in the Money category, the Government
Performance Project team evaluated the degree to which a state takes a long-term perspective on fiscal matters, the timeliness and transparency of the budget process, the balance between revenues and expenditures, and the effectiveness of a state's contracting, purchasing, financial controls and reporting mechanisms."

Can you guess the states with the best financial performance in the survey? (Hint: Do not guess New Jersey, which received a letter grade of C-minus.) Utah is tops in the nation with an A, followed by Delaware, Nebraska, Virginia and Washington, all with A-minus.

The top states were marked by "transparency in transactions and public access to state fiscal information (which have) become two of the leading indicators of a state that is functioning well in this area. Several promising new practices in real-time tracking of statewide expenditures and budgeting decisions, as well as joint executive and legislative revenue forecasting approaches..."

Oh, well. Perhaps we'll score better for "Infrastructure," how a state maintains,
improves and plans for future physical needs, including roads, bridges and buildings. Nope. Utah is tops again, followed by Florida, Kentucky and Michigan. Us? C-Plus.

Well, we've got to do better in "Information Technology," right? After all, we're wired and oh, so savvy. (Insert sound of buzzer here.) Wrong again! We're a consistent C student -- C-minus in this case.

"Advances in information technology offer the promise of propelling every organization into the future. (The study) examined how well state officials deploy technology and the information it produces to measure the resource effectiveness and results produced by state programs, make budget and other management decisions, and communicate with one another as well as with the public.

"Growing demands for public sector transparency and for public access to services 24/7 are spurring a new level of creativity in meeting citizens' legitimate needs, as well as improving internal business processes."

Michigan, Missouri, Utah, Virginia and Washington all earned As.

The silver lining in the Pew report? If the next governor fails to make headway on these issues and others, at least we'll know where to move.

Escape From NJ: College Edition

It sounds like once students see the world beyond NJ, they're not too likely to return to home.

N.J. losing out on $6B a year when college students flee state

 When it comes to K-12 education, New Jersey is usually A-1. The state is the nation’s yearly valedictorian, or salutatorian. Certainly never less than fifth in the class.

So why then is New Jersey at the bottom of so many high education categories: 50th in per capita funding; 47th in college capacity, and therefore, worst, by far, at keeping students in-state.

Republican Chris Christie condemns the "brain drain" of New Jersey students going away to college and envisions corporate partnerships to keep students here.

Independent Chris Daggett says higher education is one of his top concerns, condemns the culture of low state support for public colleges.

Gov. Jon Corzine is vulnerable on the issue: state support for four-year public colleges and universities decreased $63 million to $1.436 billion last year and county colleges took an $11 million hit, down to $222 million.

In this economy, more and more New Jersey students want to stay home. At the state’s 19 community colleges enrollment is up 12 percent, nearing 100,000 for the first time. The nine state colleges (not including Rutgers), are also tipping near 100,000, up 20 percent in the last decade.

Yet in real dollars, the state spends less on higher education than it did 20 years ago. That’s one bottom line.

Here’s another.

About 35,000 kids leave New Jersey each year to go to college and take about $6 billion with them.

"When you factor in tuition, transportation and all other student spending, there is significant revenue leaving the state," said Paul Shelly of the New Jersey Association of State Colleges and Universities. "My calculations put it at $6 billion."

Shelly says the money isn’t going far, either. Most New Jersey students stay in the Mid-Atlantic or New England.

"New Jersey does much research as to where the students are going. I don’t think they want to admit our money is being exported just over to Lehigh Valley or down in Delaware."
.........

"If we have the amenities and businesses to keep students in town, maybe they’ll consider Newark as place of permanent residence after they graduate," Pryor said.

Extrapolate that to the state, and it is the solution to the "brain drain."

"Studies show a very high percentage of students get their first jobs in the state where they attend college," Shelly said. "I don’t think New Jersey can continue to lose our bright students, the very students we create."

http://blog.nj.com/njv_mark_diionno/2009/10/nj_losing_out_on_6b_a_year_whe.html

The Litany #2: NJ's Got Character!

This is another common statement I hear when discussing life in NJ versus elsewhere in the U.S.

I take it to mean one of two things:

1) NJ has a particular type of character, unique unto itself (TRUE!)
2) Everywhere else lacks character (FALSE!)

Now #1 I can't argue. NJ (like most places) has a vibe and feel that is all it's own. We could discuss for days if not weeks what it entails, but there is no doubt that NJ does have a very strong and unique character.

But #2, though perhaps somewhat based on opinion, seems to me to be more often than not, a statement of ignorance.

Consider the following cities, all well regarded for their character: Savannah, New Orleans, San Francisco, Chicago, Portland, Seattle, Providence, Boston, Philadelphia, Austin....I could go on and on. Please note that I don't just mean the city proper either, but the surrounding metropolitan areas as well, and on into the suburbs.

The folks that argue #2, seem to have this view that once you get outside the NYC/NJ area, that the rest of the country is dull, flavorless, flat, boring, and made up of homogeneous neighborhoods with no trees and no soul. (Wait a minute, that sounds an awful lot like the many Gardens of McMansions that sprang up on manufactured cul de sacs in NJ over the past decade!)

But I digress, almost every part of the U.S. is rich in history, culture, and flavor. It's all a matter of what flavor you like. Read, travel, talk to people that live in other parts of the country. Get a true sense of life outside of NJ, don't just go by what you see on sitcoms and in movies.

Where Would You Go?

If you were to leave NJ, where would you consider moving to, and for what reason(s)? Have you spent any significant amount of time in this place? If so, please tell us what the place is all about; the people, history, geography, taxes, traffic, etc - give us the juicy details.

Poll Finds Almost Half of New Jersey Adults Want to Move Out of State

This article is from two years ago. The point, however, still stands and I doubt that the results would be much different if a poll were conducted today. The cost of living is no better and probably worse by many measures, especially considering rising unemployment and wage cuts due to the weakened economy.

The only exception I can think of is that housing costs have come down a bit, making houses more affordable for those buying today. But property taxes certainly are no better and continue to push out both residents as well as businesses.

http://www.foxnews.com/story/0,2933,303159,00.html

Even New Jerseyans can't stand living in New Jersey, according to a new poll that said nearly half of adults residing in the Garden State want to pull up stakes.

The Monmouth University/Gannett New Jersey Poll, released Wednesday, found 49 percent of those polled would rather live somewhere else.

New Jersey already is suffering from an image problem and bears the brunt of jokes because of its corruption and pollution problems. But 58 percent of those residents polled said the heavy financial burden of just living in the state is no laughing matter, and that's why they want to leave.

Poll participants cited high property taxes (28 percent), the cost of living (19 percent), state taxes (5 percent) and housing costs (6 percent) as the main reasons they want out. The poll also found that 51 percent of those who expressed a desire to leave planned to do so, with adults under the age of 50 making between $50,000 and $100,000 the most likely to flee.

"If you have the ability to leave and you don't see any possibility for change with the way the state is run — and that's the No. 1 issue here — you have to vote with your feet," said Patrick Murray, director of the Monmouth University Polling Institute.
....

Gilfillan said Corzine also had cut costs by reducing the government workforce, though he noted people would continue to leave New Jersey as baby boomers retired.

"Demographics are only going to accentuate this trend, as the bulk of these folks have yet to leave the workforce," Gilfillan said.
....

But a Rutgers University report released last week found that New Jersey, with nearly 9 million people, is experiencing a population loss and said the number of residents who had left the state more than tripled from 2002 to 2006, with 231,565 people moving elsewhere.

The Rutgers Regional Report, which examined U.S. Census Bureau and Internal Revenue Service data, noted 72,547 people left in 2006, ranking New Jersey fourth — behind California, Louisiana and New York — among states with the highest population losses in the nation.

High prices aren't the only thing driving people out. New Jersey ex-pats headed in droves to warmer climates, with 124,584 moving to Florida and 29,803 moving to North Carolina. Others (42,459) moved to neighboring Pennsylvania.

That migration depleted the state's tax coffers of an estimated $10 billion in personal income and $680 million in sales tax, according to the Rutgers report.

Why do you want to leave NJ?

What aspects of life in NJ give you reason to consider moving away to another state? For how long have you been contemplating a move, and how likely are you to actually get up and do it? Aside from family and career, is there anything about NJ that keeps you here and that makes the decision to move difficult?

What destination (or destinations) do you have in mind, and what is it about that place that appeals to you?

N.J. tax burden becoming too heavy for some

HOPEWELL TOWNSHIP -- In less than a month, Mike and Victoria Malinics, two lifelong Mercer County residents, will move across the river to Pennsylvania to pay half the property taxes on a bigger house.

"We couldn't sustain the cost of living and provide for (our children)" said Mike Malinics, 37, adding that New Jersey "has become a case of overwhelming taxation without representation."

Wife Victoria, 34, said she feels state legislators have ignored middle class residents like her and her husband, forcing them to make the difficult decision to move across state lines.

New Jersey continues to have the highest property taxes in the nation, according to a recent analysis by The Tax Foundation. After analyzing census figures, the foundation found the median property tax bill was $6,320, with 7 percent of the state homeowners' paychecks going toward property taxes.

Republican 15th District Assembly candidate Werner Graf and Ewing Mayor Jack Ball joined the Malinicses, a Ewing couple, on the New Jersey side of the Washington Crossing Bridge yesterday morning to call on state government officials to stop driving residents out of New Jersey.

"I'm not happy to see them leave, but ... I hope it sends a message to New Jersey politicians about why they're leaving," said Ball, adding that the state's high taxes have drawn away businesses from Ewing.

Graf said a large portion of residents' tax bills goes to schools, and even with a new school funding formula designed to shift some of the spending from urban districts to other districts that have large percentages of children from low-income households, there still is "no accountability" and wasteful spending in districts that are failing. He also said funding for special education should be part of income tax payments instead of being borne by residents when special needs children move from district to district.

Graf said he and running mate Kim Taylor would serve the needs of the residents of the 15th District, which includes Trenton, Ewing, Hopewell Valley, Lawrence, the Princetons and Pennington.

"They're part of the establishment in the Legislature of New Jersey, which has very little regard for middle class tax payer," Graf said of incumbent Democratic Assemblyman Reed Gusciora, D-Princeton Borough, and Bonnie Watson Coleman, D-Ewing.

Graf also cited the nonpartisan Office of Legislative Services' report from this summer which highlights an $8 billion structural deficit for the next fiscal year.

Coleman said she agrees property taxes in the state are high, and has encouraged municipalities and other governing bodies to consolidate. But she said the challenge for New Jersey is to continue to provide a high level of service people expect, such as road improvements and a commitment to open space, yet provide property tax relief.

"Almost half of the budget comes back to taxpayers in the form of services" like tax freezes for senior citizen homeowners, Coleman said, adding, "under this Democratic administration and Legislature, more property tax relief has gone into the hands of residents ... Republicans like my opponents are great to criticise, but they haven't come up with any solutions that work. If they cut services and fired everybody in state government," it still may not be enough to tackle the "huge" budget deficit, Coleman said.

Gusciora, said he has introduced a bill to find alternative methods for funding local government, and that lowering property taxes should be the priority for every elected official. "(Gov. Jon) Corzine should be given credit for increasing property tax rebates in the last four years. ... We've worked on returning more rebate dollars to tax payers," he said.

Pennsylvania ranked third, just behind New York and Florida, in the top 10 destination states for those leaving New Jersey, according to an October 2007 report by the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

According to that report, the state's population started to decline in 2002. New Jersey's 2005 aggregate adjusted gross income was reduced by $7.9 billion, a direct loss to the state economy and state taxes, due to the cumulative net outflows of people since the start of the decade, according to the report.

The report states "high housing costs, and its high overall cost of living" are possible explanations for the out-migration.

http://www.nj.com/news/times/regional/index.ssf?/base/news-18/125541271525840.xml&coll=5