The Phil Murphy Effect: “My Clients Are Fleeing NJ Like It’s on Fire.”

Well, I guess the guys at Allied Van Lines like Phil Murphy. Everyone else, not so much.

That headline arrives via email from a money manager in northern New Jersey. The Garden State already has the third largest overall tax burden and the country’s highest property tax collections per capita. Now that federal reform has limited the deduction for state and local taxes, the price of government is surging again among high-income earners in New Jersey and other blue states. Taxpayers are searching for the exits.

In the financial industry of course it’s not just the clients who are looking for greener pastures. One hedge fund manager moving his office to a southern state reports that his new home on a golf course will be more than double the size of his house in Chatham, N.J. while generating just one third of the current property tax bill.

Others are staying out of necessity, but that doesn’t mean they want to bet on a Jersey comeback. “The apartment market in New Jersey is booming because nobody wants to own here. As soon as people are not tied to the area for business reasons, they leave,” says Jeffrey Sica, founder of Circle Squared, an alternative investments firm. “We structure real estate deals for family offices and high-net-worth individuals and at a record pace those family offices and individuals are leaving the TriState for lower-tax states. Probably a dozen this year at least,” he writes via email.

Last one to leave, please turn off the lights.

 

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