TRENTON, N.J. – A report from the independent nonprofit research organization Focus NJ concludes that New Jersey has lost thousands of jobs, hundreds of millions of dollars in payroll, and millions in annual tax revenue as major employers have expanded or relocated operations outside the state.
The report, titled Missed Opportunities, examined eight companies with operations in New Jersey that either downsized, relocated, or expanded elsewhere in recent years. According to the analysis, those decisions resulted in an estimated loss of 7,220 jobs, nearly $676 million in annual payroll, more than $27.3 million in annual state income tax revenue, approximately $6.8 million in annual sales tax revenue, and an estimated $20.9 million in potential property tax revenue.
Assemblyman Christopher P. DePhillips (R-Bergen) said the report reinforces long-standing concerns among Republicans that New Jersey’s tax climate is pushing employers to invest in other states.
“You know who loves New Jersey’s economic policies?” DePhillips said. “Texas.”
Eight companies highlighted in report
Focus NJ examined business decisions involving Bristol Myers Squibb, Verizon, Samsung, Eos Energy Enterprise, Hertz Global Holdings, Walmart, Johnson & Johnson and Honeywell International.
According to the report, those companies collectively moved or expanded operations into states including Texas, North Carolina, Pennsylvania, Florida, Massachusetts, Arkansas and New York rather than continuing to grow in New Jersey.
The report estimates the following employment losses:
- Bristol Myers Squibb: 1,700 jobs relocated to Massachusetts.
- Verizon: 1,319 jobs shifted to Texas and New York.
- Samsung: 1,200 jobs moved to Texas.
- Eos Energy Enterprise: 1,000 jobs relocated to Pennsylvania.
- Hertz Global Holdings: 700 jobs moved to Florida.
- Johnson & Johnson: 620 jobs shifted to North Carolina and Pennsylvania.
- Walmart: 481 jobs moved to Arkansas.
- Honeywell International: 200 jobs relocated to North Carolina.
Combined, those moves account for an estimated 7,220 jobs that Focus NJ says could have remained in New Jersey under a more competitive business climate.
Revenue losses extend beyond payroll
The report argues the economic impact reaches well beyond employment numbers.
Using salary assumptions for each employer, Focus NJ estimates New Jersey forfeited approximately $675.7 million in annual payroll tied to those positions. That translated into an estimated $27.3 million in annual state income tax revenue that instead followed employees into other states.
The report also estimates New Jersey loses roughly $6.76 million each year in sales tax collections associated with spending by those workers.
Focus NJ further calculated that office buildings and manufacturing facilities constructed in other states instead of New Jersey represent more than 4.18 million square feet of commercial development and approximately $20.9 million in annual property tax revenue that local governments could have collected.
According to the report, those revenue losses reduce funding available for local governments, school districts and other public services while contributing to the state’s long-term structural fiscal challenges.
Corporate tax rate remains point of debate
DePhillips attributed the migration of businesses largely to New Jersey’s effective corporate business tax rate, which he said reaches 11.5% for certain corporations.
“We have warned of this for years. It’s not a mystery. It’s basic economics and a general knowledge of human behavior,” DePhillips said. “Businesses ask why should they pay 11.5%, in addition to all the other ways New Jersey is unaffordable? Until the state offers a competitive economic environment, in-state businesses will continue to flee, and potential businesses will set up shop elsewhere.”
States identified in the report—including Texas, Florida, North Carolina and Pennsylvania—generally impose lower corporate tax burdens than New Jersey, a factor the report suggests influences corporate site-selection decisions.
The report states that these eight companies represent only a sample of broader business migration occurring across the state and warns that continued losses could undermine New Jersey’s long-term economic competitiveness.
Business survey echoes concerns
Separate findings from the New Jersey Business & Industry Association cited by DePhillips paint a similar picture.
According to NJBIA, 59% of businesses surveyed reported having no plans to expand in New Jersey. More than twice as many respondents said they would choose another state for future expansion rather than invest within New Jersey.
The organization also found that 87% of employers believe business affordability has worsened during the past five years and rated New Jersey less competitive than neighboring states on taxes and government fees.
While Focus NJ and NJBIA are separate organizations, both reports argue that the state’s cost of doing business has become a growing obstacle to retaining employers.
Republicans call for tax reforms
In response to the findings, DePhillips and Assembly Republican Budget Officer Brian Rumpf are calling for a special hearing of the Assembly Budget Committee to hear testimony from executives whose companies have reduced or relocated New Jersey operations.
DePhillips is also urging lawmakers to consider legislation he sponsors that would gradually reduce New Jersey’s corporate business tax rate to 2.5% under Assembly Bill A2654. Another proposal, Assembly Bill A2702, would reduce the state’s sales tax to 6%.
Supporters argue those measures would make New Jersey more competitive with neighboring states and encourage employers to expand within the state rather than relocate elsewhere.
Why it matters
The Focus NJ report concludes that the economic consequences extend well beyond individual companies.
“Collectively, these findings underscore the broader economic consequences of business outmigration, illustrating not just the immediate loss of jobs, but the cascading fiscal impacts on state and local revenues,” the report states.
The report adds that revenue associated with retaining those employers “could have been allocated to school districts and other budget line items that faced cuts, without deepening the structural deficit.”
DePhillips said lawmakers should view the findings as a warning that New Jersey’s economic policies require significant changes.
“I wonder how many more missed opportunities New Jersey will have to endure before Democrats realize they have run out of other people’s money,” DePhillips said. “You can’t tax and borrow your way to prosperity. It doesn’t work and has never worked in the entire history of the world.”
