In the past, we have jokingly said in this space that if the state really wants to realize a revenue windfall, it will institute a leaving-town tax, to be paid when you load a U-Haul and drive it across state lines.
It's a poignant image, because New Jersey typically ranks near the top when it comes to moving companies' surveys of those outbound relocations. And while those surveys are about as scientific as using leeches to cure the flu, there's no denying plenty of people have fled for greener pastures as New Jersey's high cost of living drives away some of its best and brightest.
In a sense, of course, that tax already exists — the realty transfer fee, which is applied to all home sales. It's about as popular as rutabagas. But the recent chatter about ending the tax is just so much pandering, from both Gov. Chris Christie and legislators who pretend they're willing to consider repealing it.
Naturally, for property owners, it would be a boon to get rid of this onerous fee. It typically hits the seller for at least a thousand bucks as he or she hands over the keys, and the cost increases as the sale price goes up. At the median sales price of $300,000, that fee is $1,700. And the tax became steeper during the Jim McGreevey years, when he signed a pair of increases as the real estate market boomed.
So it's awful, but here's why it's not going anywhere: It's projected to bring in almost $300 million in the current fiscal year, and even more in 2015. That's several orders of magnitude more than much-ballyhooed online gaming will bring to the tables, and will doubtlessly plug holes in Abbott districts and pension plans alike.
Thanks to his brash style, Christie has already cast this as a Legislature-against-me issue that plays so well before simpleminded voters in primary states, but assures no solutions at home. But here's a plan that could work: The tax should have been rolled back to its early 2000s levels when the market cratered. Let's make it so. Then, instead of wiping it out, lawmakers should direct their energy toward making continued improvements to the business climate — more incentives for companies that hire, relocate here, expand and claim space in urban job centers.
The tax isn't going anywhere, but we can do more to keep residents from going anywhere else. This would be a good start.
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