According to a recent study by the advocacy group New Jersey Policy Perspectives (NJPP), New Jersey’s Millennial (18-39 year-olds) population is not fleeing the state in droves but has maintained the same pace of exodus that has been in place since 2004. Furthermore, “the rate of millennials leaving New Jersey isn’t any different from the rate of that same group leaving ““comparable”” states.” Oh, that’s comforting!
In this case, the comparable states include other “Blue” states, such as New York, Pennsylvania, Connecticut, and Massachusetts. Since KCS’s founding (8/11), we have been concerned with the impact of underfunded state pension systems on the ability of those states to meet the expanding cost of providing the required social safety net. The issues related to New Jersey’s pension underfunding are well known, and they are and will continue to influence migration to and from our state.
Millennials are hounded by poor job prospects, the lack of wage growth, rising taxes, expensive housing, and growing student loan debt. These inputs are certainly not the formula for a robust economy. Did you know that more NJ Millennials live with their parents or a relative than Millenials in any other state? Not surprising then that Millennial outmigration hasn’t expanded, yet. However, Mom and Dad or Uncle and Aunt so and so are not the long-term answer.
New Jersey’s recently completed budget process once again involved a series of tax increases on business and individuals (supposedly millionaires). With property tax bills among the highest in the country, there remains little appetite or room for further tax increases. We believe that DB plans need to be maintained, but a new course in managing them must be undertaken sooner rather than later.