NJ Fiscal Folly

Wednesday, February 08, 2006

(a) We're Number 37

Back in December, the Beacon Hill Institute in Boston released a study called the State Competitiveness Report 2005. As described in the press release, BHI defines competitiveness as "the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth".

New Jersey ranked #37 overall.

The report assigned 42 variables to eight categories:

-- government and fiscal policy
-- security (eg, crime rates)
-- infrastructure (eg, high-speed lines, housing costs)
-- human resources
-- technology (eg, R&D, scientific/engineering labor force)
-- business incubation (eg, available funding, new firm formations)
-- openness (eg, foreign direct investment, residents born abroad)
-- environmental policy

Although some of the variables seemed a little quirky (air passengers per capita?), most were reasonably conventional. The eight categories were then combined into a single "competitiveness index".

NJ's category rankings were as follows:

-- government and fiscal policy: #43
-- security: #7
-- infrastructure: #49
-- human resources: #15
-- technology: #24
-- business incubation: #13
-- openness: #12
-- environmental policy: #50

In addition to poor rankings for state & local taxes (#37) and the state budget deficit relative to GSP (#35), NJ also ranked poorly for housing costs (#49), travel time to work (#48), the percentage of the labor force represented by unions (#46), "toxic release inventory" (#42), and carbon emissions (#50).

Update: Due to a data input error, BHI revised the rankings in Feb 06. New Jersey's overall ranking improved slightly, from #37 to #34.

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