(10/10/07) TRENTON (AP) - New Jersey's accelerating population loss is starting to have significant economic and fiscal consequences for the state, according to a Rutgers University report that found the state may be becoming a less attractive locale. The report found the state lost 231,565 people between 2002 and 2006, including 72,547 people last year. The latter was the fourth highest loss in the nation behind only California, Louisiana and New York. Meanwhile, North Carolina grew by 807,000 people over the four-year period, displacing New Jersey last year as the nation's 10th most populous state, the report stated. When lost income and sales taxes from the people who left New Jersey are considered, the population drain is estimated to have cost the state $680 million in tax revenue last year, the report found. That estimated loss comes with the state confronting annual budget deficits and struggling to meet billions of dollars in unmet needs. The projected budget deficit could be as large as $3.5 billion next year, according to Gov. Jon S. Corzine. The Rutgers report was authored by James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, and Joseph J. Seneca, a university professor. "The population outflow is real, is approaching worrisome dimensions and is exerting a small, but increasingly negative impact on the New Jersey economy," they wrote. They said the reasons behind the state's population loss were unclear. But they said the report was designed to confirm anecdotal reports that New Jerseyans were either selling their homes and moving to lower-cost states or establishing a permanent residence in low-tax states while continuing to maintain a New Jersey home. Democrats didn't comment on the findings, but Republicans expressed worry. "New Jersey residents have been sentenced to a lifetime term of brutal and ever-increasing taxes without any realistic hope of parole as long as the Democrats are in a position to keep spending their money and running up the credit cards," said Assembly Minority Leader Alex DeCroce, R Morris. Senate Minority Leader Leonard Lance described the report as "devastating." "People are voting with their feet," said Lance, R-Hunterdon. "We have to go on a fiscal diet and under no circumstances should we raise taxes yet again." From 2000 to 2005, the largest net outflow of New Jersey taxpayers was to Florida (124,584 people), Pennsylvania (42,459 people) and North Carolina (29,803 people), their report found. It found the state had a positive net inflow of taxpayers from New York (148,538 people). The struggling housing market could help stem the outflow, the report said.

"Basically, if you can't sell your house, you can't move," Hughes and Seneca stated in the report. But they said policies to reduce the nation's highest property taxes, invest in science and technology businesses, improve infrastructure and boost business confidence could help retain residents and businesses.