The state-wide economic impact of Merck’s worldwide HQ move “back” to Kenilworth (legacy Schering-Plough’s global HQ) will be pretty moderate, actually — as all the state wide taxes paid will stay, in state — in New Jersey, proper.
However, it is hard to overestimate the “local” — township, and county-level effects of such a complete dislocation. Summit’s Mayor is worried, so too is Readington’s council (the locus where Whitehouse Station is actually deeded, and titled). Local taxes pay for schools, and garbage pickups, and snowplows. It’s all local — and when the multinationals move — the local economy takes a hit beyond the obvious job losses. The entire community shrinks. It is inevitable — but it is sad.
Here’s just a bit from NJ.com — do go read it all:
. . . .In June, the governor vetoed legislation to give funding to towns that lose drugmakers and other companies whose departures may stress the tax base. Colin Reed, a spokesman for Christie, declined to comment and referred to the governor’s veto message, in which he lumped the measure with others that he said should have been part of annual budget negotiations.
Merck is seeking a buyer for its 88 acres (36 hectares) in Summit, which has Moody’s highest Aaa rating. Residents there paid an average property-tax bill of $16,051 in 2012, more than twice the statewide figure.
“We’re mildly concerned at this point,” said Mayor Ellen Dickson, 61, a Republican. “They are 7.2 percent of our tax base. They pay $9 million a year in real-estate taxes. They’re committed to paying the taxes through 2014, but of course they’ll be doing a tax appeal effective 2015.”
Kelley Dougherty, a spokeswoman for Merck, declined to comment on the company’s plans for the sites. She referred to an Oct. 1 news release that said the closures were part of worldwide cost reductions. . . .
We will keep you informed, here.