Congressman Josh Gottheimer (NJ-05) has been throwing the "M-word" around again. The Bergen County Democrat has taken to social media to decry what he calls "moocher states" -- which Gottheimer defines as those who get more back than they pay in.
According to Gottheimer, the country's top "moocher" is Mississippi, the state with the highest percentage of African-American residents -- 37 percent and growing. In contrast, New Jersey's percentage -- 13 percent -- is about a third of Mississippi's. So what is Congressman Gottheimer trying to say and who is he calling "moochers"?
Perhaps the real reason Mississippi receives more in federal money than New Jersey does, is that the folks who live in Mississippi are -- on average -- much poorer than those who reside in New Jersey. According to the latest data from the United States Census Bureau, Mississippi is the poorest state in America, with a median household income of just $40,593. In contrast, New Jersey is the fourth richest state in America, with a median household income of $72,222. Only Maryland, Hawaii, and Alaska had higher median household incomes, according to the U.S. Census Bureau.
By another measurement -- covering the years 2010-2014 -- New Jersey is the second richest state in America, with a Per Capita Income of $37,288. By this measurement, Mississippi is again the poorest state in America, with a Per Capita Income of just $21,036.
In applying the "moocher" label to Mississippi, Democrat Gottheimer claims that New Jersey gets back just 33 cents for every dollar it sends to Washington, while Mississippi receives $4.38 for every dollar it sends to Washington. Despite Gottheimer's claims, the Pew Charitable Trust Reports that New Jersey received far more in actual federal money than did the state he mocks as a "moocher":
But the Democrat has raised an interesting concept in his claim that some places "mooch" off other places when they get back from government more than they pay in. If there are "moocher states" as Democrat Gottheimer claims, can we apply Gottheimer's measurement to other cases -- such as the relationship between municipalities or school districts within a state. If, as the Democrat Congressman claims, there are places that "mooch" off the federal government, does it not also follow that there are places that "mooch" off state government?
This was the central idea behind State Senator Mike Doherty's Fair School Funding plan, which he championed back in 2012. According to Doherty (R-23) and his acolytes, the solemn promise made to the voters when the state income tax was established -- that the proceeds would be used so that property taxes could be reduced -- was broken by the state judiciary (the failsafe of the political establishment) when it absconded with the revenue from the state income tax and directed that it be used for social engineering purposes, in what became known as the Abbott Decision. Worse still was that the two other branches of the State's government -- the Executive and the Legislature -- allowed the Judiciary to get away with it.
In effect, New Jersey's judiciary set up a "moocher" and "mooched upon" relationship within New Jersey, based on the municipality that you happened to reside in. This is the world now -- as Democrats like Josh Gottheimer see it: The "moochers" and those "mooched upon."
So who are the "moochers" in Democrat Gottheimer's brave new world?
In 2012, Senator Doherty conducted a series of town-hall meetings in which he demonstrated how some municipalities in New Jersey were -- to use Democrat Gottheimer's phrase -- "mooching" off other municipalities. Using data supplied by the Department of the Treasury, Department of Education, and the Office of Legislative Services, Doherty compared two towns -- one, a so-called "Abbott" District in Monmouth County; the other, a non-Abbott in Sussex County.
Like the federal income tax, New Jersey has a progressive income tax. Those who earn more, pay more. According to the figures provided to Senator Doherty, the top 1% of earners pay 38.5 percent of the state income tax, while the bottom 33 percent pay nothing.
Doherty compared Asbury Park, an Abbott District, with Sparta Township, a non-Abbott, and found that the average Sparta resident paid almost 6 times as much income tax as the average resident of Asbury Park:
Doherty also found that the average student in Asbury Park got back 17 times as much in income tax revenue as the average student in Sparta Township:
In what Congressman Gottheimer would call a clear case of mooching, Asbury Park paid in just a sixth -- in income taxes per person -- of what Sparta did, but got back 17 times more!
Senator Doherty made the point that New Jersey got back just 61 cents on every dollar it sent to Washington, DC, but noted that for non-Abbott towns like Sparta, the return was even worse on the state income tax money it sent to Trenton.
Sparta Twp - $5,611,989 / $36,267,481 = $0.15
Asbury Park - $57,632,816 / $3,835,809 = $15.02
That's right. Towns like Sparta get back 15 cents on every dollar they pay in state income tax to Trenton.
Senator Doherty noted that unlike everywhere else in America, New Jersey's school funding formula -- and its use of the state's revenue from the income tax -- left many of its towns without a basic threshold with which to educate their children. And because of this, New Jersey needed artificially high property taxes to pay for the children in these revenue-starved towns.
The Trenton Democrats have argued that these so-called Abbott towns need all that revenue because they are economically disadvantaged. Yes, they once were, but the Democrats have ignored the economic gentrification going on in places like Hoboken, Jersey City, and Asbury Park -- and the enormous influx of wealthy professionals and rich corporations. The Democrats' formula for apportioning the state's take from the income tax is locked in a time warp -- based on figures decades old.
In fact, when the state commissioned a study on how effective its formula was at helping economically disadvantaged children, the state's own figures showed that it missed half the state's poor children -- those who lived outside the so-called Abbott towns. That was a decade ago, the Abbotts have only grown collectively richer since then.
Today we have a situation where poor families in suburban and rural New Jersey are subsidizing rich people in chic urban hotspots. Their cut of the revenue from the state income tax allows these hotspots to keep their property taxes comparatively low. Why should rich Hoboken get its property taxes underwritten by the income tax revenue paid by rural Warren County?
Warren County has double the population of Hoboken City (107,000 to 52,000) but the population of Hoboken has been growing while Warren is shrinking (5% vs. -1%).
And while Hoboken has just 800 veterans, Warren County has over 7,000.
The per capita income of Hoboken City is over $70,000. This compares with Warren County, at $33,000.
The median value of an owner-occupied home is $550,700 in Hoboken but only $271,100 in Warren County.
The U.S. Census reported that 5.5% of the people in Hoboken are without health insurance vs. 12.5% of those in Warren County.
73.5% of those 25 or older in Hoboken have graduated from college. In Warren County that figure is 29.6%.
So why do Trenton Democrats continue to support a system that allows rich people in Hoboken to "mooch" off poor families in Warren County? Somebody needs to ask Democrats like Phil Murphy and Tim Eustace next time they hold a press conference with Josh Gottheimer to complain about "moocher states."