Platform Update

April 2008

ACTION ITEMS

New Platform Goals to be Set: Economic Development Coalition members are invited to attend a meeting to review our priorities and discuss future activities. The meeting is scheduled for May 28 from 2 p.m. to 4 p.m. at the Verizon Center in Basking Ridge. All are invited. If you plan to attend, please RVSP to Maryellen@njchamber.com by May 21, and you will receive a confirmation e-mail with directions. For security purposes, you must let us know if you plan to attend the meeting. Thank you to Verizon for hosting this meeting.

New Jersey Migration Study: The State Chamber is partnering with the Governor’s Office of Economic Growth (OEG) and the New Jersey Commerce Commission on a study that analyzes the migration patterns of New Jersey residents. This study will expand upon existing economic research and further explore migration in and out of New Jersey. Princeton University is conducting the study, which will consist of demographic and economic data modeling and analysis. Data collection has commenced, and the study should be completed by June.

State Chamber Testifies on Economic Growth: Last month, Chamber staff testified before the Assembly Budget Committee on issues impacting economic development and the business community. Michael Egenton, vice president, environment and transportation for the Chamber, told the committee that New Jersey’s regulatory climate is one of the biggest obstacles to economic growth, as evidenced by a recent study commissioned by the Chamber that compared New Jersey’s site remediation programs to other states. Egenton also discussed the importance of finding a stable, long-term funding source for the Transportation Trust Fund, which will run out of money in 2011.

State Treasurer Addresses Chamber Members on Budget: At a recent Chamber breakfast, State Treasurer David Rousseau provided an overview of the proposed fiscal 2009 state budget. He discussed the Governor’s priorities and reaffirmed the Administration’s commitment to cutting spending and restoring the State’s fiscal solvency without imposing new or increased taxes. Rousseau’s remarks were delivered on the same day the Office of Legislative Services (OLS) released their revenue updates.

OLS projects that fiscal 2008 and fiscal 2009 revenues will be $133 million less than the estimates in the Governor’s fiscal 2009 budget proposal. For fiscal 2008, the OLS revenue estimates are $155 million above the Governor’s original estimates, largely based on differences between OLS and Executive estimates of the state’s major taxes – income tax, sales tax and corporation business tax (CBT). The Governor has said that revenue shortfalls may require an additional $500 million in budget cuts. OLS and Treasurer Rousseau will provide additional revenue updates in May.

Economic Growth Team Discusses Strategy and Challenges: Gary Rose, chief, Governor’s Office of Economic Growth (OEG); Angie McGuire, deputy chief, OEG; Caren Franzini, CEO, New Jersey Economic Development Authority; and Kevin Drennan, executive director of the New Jersey Commerce Commission, provided members of the Senate Budget Committee with an overview of their priorities for economic growth in New Jersey. They described their efforts to attract and retain businesses, such as recent enhancements to the state’s business incentive programs and new financing opportunities for small and urban-based businesses. They also noted obstacles to the state’s competitiveness, such as taxes and regulations. Members of the Committee expressed concern about the state of the economy and recently revised figures from the Department of Labor and Workforce Development showing that New Jersey employers added only 4,700 jobs in 2007. Rose acknowledged vulnerability in certain sectors, such as the financial services and pharmaceutical industries, and indicated that he would concentrate on job retention.

Governor Presents Plan To Avoid Payroll Tax Increase: Governor Corzine announced a plan to prevent an automatic tax increase on employers generated by a shortfall in the Unemployment Insurance Trust Fund (UI Fund). If the UI Fund falls below a minimum level (calculated as the fund balance on March 31 each year), an increase in payroll taxes is automatically triggered to replenish the fund. The UI Fund balance is projected to fall below the minimum reserve amount and activate a $350 million increase in employer taxes for the fiscal year beginning July 1, 2008. This shortfall was caused by years of diverting monies from the UI Fund to help balance annual state budgets. In order to make sure the tax increase does not take place, Governor Corzine proposes to change the date on which the UI Fund balance is calculated from March 31, 2008 to June 30, 2008 for this year only, and to transfer $260 million from the fiscal 2008 budget surplus to the UI Fund. The Chamber appreciates the Governor taking these steps to prevent a tax increase on the employer community.

Urban Transit Hub Regulations Approved: The New Jersey Commerce Commission Board of Directors recently approved the proposed regulations to implement the Urban Transit Hub Tax Credit Act, legislation advocated by the Chamber that was enacted into law at the end of the previous legislative session. This act establishes a tax credit program for businesses that engage in significant capital investments in urban transit hub areas – properties located within a half-mile of a rail station in municipalities that qualify for urban aid. A business that makes a capital investment of $75 million and employs at least 250 full time employees at an urban transit hub is eligible for tax credits equal to 100 percent of its capital investment costs. The municipalities eligible to participate are Camden, East Orange, Elizabeth, Hoboken, Jersey City, Newark, New Brunswick, Paterson and Trenton. The proposed regulations will be published for public comment in the May 5 issue of the New Jersey Register.

Additionally, the state is hosting two seminars to provide information about this new opportunity. The first seminar will be held May 7 from 9 a.m. to 12 p.m. at the Heldrich Center in New Brunswick, and the second will be held May 8 from 9 a.m. to 12 p.m. at the EDA Waterfront Tech Center in Camden. Call (866) 534-7789 or e-mail ServiceCenter@commerce.state.nj.us for additional information or to RSVP.


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MaryEllen Peppard
Government Relations Manager
New Jersey Chamber of Commerce
216 West State Street
Trenton, NJ 08608
Phone: (609)989-7888 Ext. 125
Fax: (609)989-9696
Maryellen.Peppard@njchamber.com