The exit interview often gets a bad rap. Departing employees dread them and companies sometimes fail to analyze or follow up on the information provided. However, done properly, the exit interview can be a useful tool for gleaning insights on how to improve an organization and keep more people from leaving for greener pastures.
It’s time New Jersey, which has lost $20.7 billion in net adjusted gross income since 2004, conduct its own “exit survey,” and analyze why so many of our taxpayers are leaving and taking their money with them. At this writing, legislation is moving in the Senate to require the state to survey companies that move New Jersey operations out of state. That’s a good place to start.
Of course, to many of us, the answer seems obvious. While we’ve made some noteworthy progress on tax reform recently with the repeal of the estate tax, the reduction in the tax on retirement income and the increase of the earned income tax credit, New Jersey’s tax system, as a whole, remains uncompetitive both regionally and nationally. Consider these facts:
The data points to a correlation between taxes and outmigration. While New Jersey has lost $20.7 billion in net adjusted gross income over the past 11 years, states with more favorable tax systems have gained income. Florida, which has no state income tax and has consistently ranked among the Top 3 destinations of former New Jerseyans for more than a decade, has actually gained $138 billion in net adjusted gross income since 1992. During that same 1992-2015 time frame, New Jersey lost $31 billion in net adjusted gross income. There are now 519,000 New Jersey-born taxpayers living in Florida, a 6.9 percent increase since 2010.
While competing with Florida may be impossible, consider that our No. 1 and No. 2 outmigration states are Pennsylvania and New York. Our best opportunity NOW to ensure our competitiveness is to focus on getting our taxes in line with our border states.
Updated federal data shows New Jersey Millennials, age 18 to 34, continue to be our largest outmigration group. More than 940,000 young people left New Jersey from 2007-2015, for a net loss of 167,000 Millennials – the very group we count on to fill our future workforce needs.
New Jersey took important first steps last year toward comprehensive tax reform. But if the state is serious about stopping the outmigration of residents and their wealth, the value of exit interviews should not be overlooked. We should not only ask why taxpayers are leaving, but we should listen to the answer and act on it.