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Thursday, October 18, 2007

Here's A Poll The Cincinnati Enquirer Has Kept Quiet: High Taxes Mean Residents Flee

CINCINNATI (TDB) -- A new poll sponsored by the Cincinnati Enquirer's parent corporation shows half of New Jersey's 8.7 million residents want to move out of that state. The biggest reason: High taxes.

Gannett Co. Inc. sponsors the Monmouth University Gannett New Jersey Poll, which was released Wednesday. Gannett owns the Enquirer.

The poll should buoy opponents of a plan to increase Hamilton County's sales tax. They contend the $736 million financial package for a new jail and public safety programs in Cincinnati is too costly. They also see the proposed tax increase as harming economic growth prospects. The anti-tax movement is largely built around the idea that lowering taxes stimulates growth. The Enquirer has supported the tax hike, but it might want to review the poll results that show people want to flee for low-tax areas. Hamilton County has been losing population to suburban counties, and to Kentucky and Indiana, which it borders.

New Jersey, too, has a huge problem with out migration. The poll questions were designed to discover why people are leaving that state:

"The poll asked asked wanting to leave the state to name their top reason why and found that property taxes (28%) are the most common factor, followed by the high cost of living in New Jersey (19%). In fact, when these responses are added to those who name other state taxes (55) and housing costs *6%), nearly 6-in-10 (58%) of those who want to leave the state cite an issue related to the financial burden of living in New Jersey as the main reason behind their desire to live elsewhere."

Taxes overwhelmingly dominated all reasons why some 4.3 million New Jerseyites would like to pack their bags. It topped the weather (8%), environment (3%), desire for a change of scenery (4%), over development (4%) congestion (3%) and corruption (6%).

Patrick Murray, the poll director, said:

"The poll points to a real possibility that active working adults and higher earning retirees will leave the state in greater numbers, leaving behind a generally low-income senior population. This could put added demand on public services, but with a diminished tax base to carry the costs."

6 comments:

  1. This seems obvious to me. When a jurisdiction spends decades jacking up taxes to pay for more social services, they attract people who don’t pay much tax, but who use a lot of social services, namely poor folks. Meanwhile, people who pay gobs of taxes and use few social services (rich folks) drift away to the ‘burbs or even further to rural areas. Each group gets what they want, for a little while at least.

    But unrestrained tax-and-spenders eventually go broke, and the go-it-aloners ultimately realize how nice it is to have public amenities like parks, modern roads, sewers and schools. The most successful societies find a balance that accommodates both. They learn how to shear the sheep without slaughtering them.

    We had such a balance when I was growing up here in the 70’s and 80’s. Taxes were low to moderate, but we got a lot of bang for our bucks. Schools were effective, parks were plentiful and safe, and businesses thrived.

    Now Hamilton County has the 2nd highest property taxes in the state. The jail tax gives us the 2nd highest sales tax in the state. And Ohio has the fifth worst tax climate in the nation (improved from 2nd worst last year). Like you said, businesses and residents have fled across the county line, and even out of state, where infrastructures are newer and taxes are lower. Mainstays like GE, P&G and the automakers have shifted their new facilities investments elsewhere causing a tremendous decline in city and county tax revenues.

    Nobody was trying to cause the decline. They had to prosper or perish in a climate of bloodthirsty global competition, so they cut their costs and survived. But this has decimated our highly-developed, high-cost urban centers. Year after year governments have grown at 8% or 10% while the economies they depend on for cash have grown at 4% or 6%. It doesn’t take many years of this to cause a financial crisis, and that’s exactly where we find ourselves.

    The only way for our city and county to recover is to get aggressive like everyone else. Taxpayers have to hold governments’ feet to the fire and make them deliver significant value for the money they spend. Governments have to cut costs and kill programs that aren’t measuring up to their missions. A simple policy like limiting the growth of government to the rate of inflation will restore fiscal discipline.

    The success and prosperity of our taxpayers provides the means to do a lot of good things in our community. Capital (human and financial) will flow to where it can be effective, and stay where it’s well treated. If it’s abused or taken for granted, it will flee, as we have already seen. But our taxpayers can’t thrive if the governments they depend on for organization and leadership aren’t managing that capital properly. It’s time for government to step-up, get its own house in order, and live within its means.

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  2. Rob Goering, Republican Hamilton County's treasurer, is against the jail tax. Calls it a rowth killer. People are going to move out. They won't move in either because they won't have to pay as much to live in Clermont County and places next door.

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  3. The plan, if approved, will start to collect added taxes immediately, while jail won't be completed for several years. The money will be used to cover coming budget deficit in 2008. They cannot provide any details re planned use for the $500 million left after building the jail, but they will collect the added taxes for years, with no accountabilty.

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  4. Hi Anon 3:15 --

    Is there any polling on this jail/safety tax plan? Is there any sense which side has the momentum? I do think there is a general feeling among the public that tax increases are unpalatable. I am kind of perplexed how it is that on a local level some elected officials will pursue a tax increase, but on the national and state level such a move is considered totally out of bounds. There is a disjointedness that is difficult to fathom.

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  5. Bill, my guess is that the Enky is polling it, but won't do anything with the results if they show, as I suspect, that the jail tax is trailing badly.

    Gee, "somebody" has been talking about people "voting with their feet" for a long time.

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  6. Hi Bizzyblog/Tom --

    Hmmm. Somebody has been talking about those who vote with their feet, a wonderful idiom that means leaving to get out of a bad situation.

    Tom, I think taxes must be fair as well as kept to a minimum. Not all taxes are unwise, but the power to tax can be used unwisely. And this may be an unwise attempt to exercise the government's taxing authority. It simply looks economically foolish to become a higher taxed enclave when you are competing against lower taxed enclaves.

    It is no secret that at this particular moment in Ohio's history, the overriding issue is righting, or correcting, or making attractive the state's business climate. What to do about the economy was probably the predominant concern that the last gubernatorial election turned on --who had the best vision for getting Ohio going again. And nobody who ran as a serious candidate in that election talked about a tax increase as the way to make that happen.

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