2015 Regional Report: The Northeast

In the Northeast, the Recession isn’t over yet.

#46 Massachusetts: Job Growth Continues

THE MASSACHUSETTS ECONOMY is in Year 5 of an expansion that began just as the last recession was ending. Job growth in Massachusetts will continue accelerating over the next couple of years before stabilizing in 2018, according to a New England Economic Partnership forecast.

While the commonwealth’s technology-driven growth continues to fuel prosperity, its aging work force causes concern. Increasingly, job growth will be in non-manufacturing jobs, particularly
education, health services, professional and business services, leisure and hospitality.

“Massachusetts feels they have a stranglehold on the pharma industry and they haven’t done much spending to welcome relocators.”

Business groups like the Boston Chamber of Commerce want to expand charter schools, “close the achievement gap,” and strengthen connections between employers and students. They’re also focused on tax-reform proposals, reining in unemployment insurance taxes and reducing health care costs. To bolster global positioning, business leaders call for expanding international connections at Logan Airport and funding improvement to the Port of Boston.

Incentives? Massachusetts “feels they have a stranglehold on the pharmaceutical industry and they haven’t done much” spending to welcome relocators, asserts Dan Breen. The Tax Foundation ranks Massachusetts’ state and local tax burden 11th highest out of 50 states and ranks it 25th in business-tax climate. Massachusetts spends more than $2.26 billion a year on incentives.

#47 New Jersey: Moving on Out?

BY MANY ACCOUNTS, the Garden State’s economy is rocking. So why all the wanderlust? Mercedes made headlines this winter when it accepted a $23 million incentive package from Georgia and bid farewell to Montvale.

“New Jersey has some of the strongest incentives you’ll see in this countr.”

Households have been antsy, too; New Jerseyites led the nation in outmigration in 2014, the fourth time in the last five years that they’ve captured this dubious honor. Behind the exodus are such factors are high costs of doing business: taxes, fees, real estate costs and payroll. Professional services are scaling down. Still, 2015 will be “a positive year,” according to the New Jersey Business & Industry Association. In a survey last fall, 40 percent of companies the NJBIA surveyed said their profits rose in 2014, with 45 percent anticipating higher sales in 2015. Plus, 44 percent of companies spent more in 2014 than in the previous year, a rate they expect to continue this year. Furthermore, 22 percent expect to hire this year, twice the rate of future downsizers.

Executives surveyed listed health care benefits and taxes as major concerns, while fretting that government will reach into their pockets to make up budget shortfalls. New Jersey’s economic
development programs generally earn glowing reviews. The state “has some of the strongest incentives you’ll see in this country,” says Joe Lacy, managing director of Biggins Lacy Shapiro
& Company, based in New York, Princeton and Chicago.

Jones Lang LaSalle’s Breen says, “Grow New Jersey has been very well received by the business community.” Others blame application complexity for scaring off aspirants. Infrastructure
improvements and more competitive labor costs will please business owners and chiefs, but don’t expect them short term.

The Tax Foundation ranked New Jersey’s state and local tax burden 2nd highest out of 50 states and ranks it 49th in business tax climate. New Jersey spends more than $675 million per year on incentive programs.

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