Why are NJ Businesses Headed South?

New Jersey has become unattractive to business owners, and southern states are picking up the slack. The evidence is a growing list of companies, closing their doors in New Jersey and headed elsewhere.

Mercedes-Benz, headquartered in Bergen County, was the latest to announce such a move, with plans to shift its corporate operations to Atlanta, Georgia.

The South, which had been overlooked for years by business executives, has gradually shed itself of a poor perception. Improvements in education and quality of life, plus a lower cost of living, have become too appealing to ignore for businesses, the jobs they create and residents of other states.

James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers, said he's recognized an on-and-off shift from New Jersey to the South over the past decade or so.

"After the year 2000, we became much less competitive in terms of cost," Hughes said. "Our business taxes went up; the personal income tax went up; sales tax came up, and New Jersey gained a reputation as being very business unfriendly."

The latest Business Tax Climate Index from the Tax Foundation ranked New Jersey dead last among the 50 states and Washington, D.C.

"We have a lot of competitors out there that are very, very anxious to take away some of our economic assets," Hughes said, noting New Jersey's close proximity to New York City is no longer a big seller as advances in technology can now connect anyone from anywhere.

In July 2014, Sealed Air of Elmwood Park announced plans to move to Charlotte, N.C., where it was promised tens of millions of dollars in tax breaks. Three months prior, the Hertz Corporation said it would also be leaving New Jersey. A two-year transition will eventually move its headquarters to Florida's Gulf Coast.