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Platform Update

February 2008

ACTION ITEMS

Governor Unveils FY 2009 State Budget: Governor Corzine presented his fiscal 2009 budget to the Legislature yesterday. The $32.9 billion budget includes $500 million less in spending than the fiscal 2008 budget, reduces the size and cost of State government by $350 million and calls for no new taxes. It calls for the elimination of three state departments – Agriculture, Commerce, and Personnel – and the reduction of state government by roughly 3,000 jobs. In addition, the Governor seeks several legislative initiatives designed to reform the budgeting process so we do not wind up with similar fiscal problems in future years.  Budget Highlights:

  • The $32.9 billion budget cuts spending $500 million below the $33.5 billion budget signed last year. This is the second-largest cut in spending year-to-year in New Jersey. The budget reduces the size and cost of government by $350 million through workforce reductions, department consolidations and other efficiencies. The Departments of Agriculture, Commerce, and Personnel will be eliminated. The state workforce will be trimmed by roughly 3,000 through layoffs and an early retirement program. In addition, to maximize the savings, the Administration will allow only 10% of the vacated positions to be backfilled. The budget reduces the use of one time revenue sources by 90%, moving the state ever closer to a philosophy of only spending recurring revenue. Property tax rebates will be eliminated for those making over $150,000. The current ceiling is at $250,000. The budget proposes a $1.1 billion contribution to the state pension fund, roughly 70% of the total obligation. The proposal lowers aid to higher education by $76 million. Charity care aid is reduced by $108 million.  Aid to towns and cities are cut by approximately $190 million.
  • A new school funding formula passed by the Legislature in January calls for direct aid to increase by $530 million to $7.8 billion in the new budget year, which starts July 1.

Chamber staff will continue to analyze the budget proposal and work with the members of the Legislature to make sure your voice is heard during the four-month debate on the budget. Updated information on the budget can also be reviewed by visiting www.njchamber.com 

New Jersey’s Competitive Advantages: At the recommendation of Platform members, the Chamber has compiled a list of strengths that make New Jersey competitive. This list will be used to facilitate policy discussions with legislators and executive staff and advocate for legislative and regulatory policies that capitalize on these strengths.

Business Incentive Legislation Signed into Law: Several legislative initiatives advocated by the Chamber were signed into law during the 212th Legislative Session that ended last month. These new laws improve and add to the State’s business incentive programs.  

  • Expanding Tax Credit to Small Business – A-1696: Governor Corzine signed into law on Jan. 13. Amends the Business Retention and Relocation Assistance Act. Current law requires that a firm relocate a minimum of 250 jobs to be eligible for a tax credit. This bill would provide small businesses the same tax credits currently available to large businesses by lowering the minimum full-time jobs requirement to 50 or more employees within New Jersey.
  • CBT Credit for Digital Media Industry – S-2526: Governor Corzine signed into law on Jan. 11. Provides a corporation business tax credit for certain digital media content production expenses incurred in New Jersey. This bill broadens the existing film credit program to include digital media. This measure will stimulate economic growth by providing incentives for the digital media industry to operate in New Jersey, attracting new high-wage technology jobs.
  • Urban Transit Hub Tax Credit – S-3043: Governor Corzine signed into law on Jan. 15. Establishes a tax credit program for businesses that engage in significant capital investments in urban transit hub areas, specifically 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. Currently nine municipalities are eligible to participate in the program. The Chamber supports expanding the program to additional municipalities on the rail line. 
  • UEZ Administrative Reform – A-3938: Governor Corzine signed into law on Jan. 13. Broadens the exemption for small businesses under the Urban Enterprise Zone (UEZ) program. Current law requires a business that qualifies for a sales tax exemption to pay the sales tax and then apply for a rebate, except that a business with gross receipts of less than $1 million can receive the sales tax exemption directly at the point of sale. This legislation expands the exception to include a business with gross receipts of less than $3 million. While this legislation is a good first step, the Chamber supports repealing the rebate requirement for businesses of all sizes. 

Chamber Comments on Development Subsidy Reporting Requirements: During the previous Legislative Session, Governor Corzine signed legislation that expands disclosure and reporting requirements for businesses that receive economic incentives or subsidies from the state, including tax credits, grants and loans. This law requires such companies to submit annual progress reports, for the duration of the subsidy or for five years, on job creation or retention goals, statewide employment changes and salary and benefit information. Additionally, the State Treasurer is required to publish an Annual Unified Economic Development Budget Report providing comprehensive information about the costs and benefits of all development subsidies of the State. To address concerns about certain provisions of the law, including taxpayer confidentiality and fees, the Chamber provided comments to the New Jersey Commerce Commission.  

NJ Economic Policy Forum C-Suite Survey Results: As noted in previous updates, the Chamber partnered with Cushman & Wakefield, Rutgers University and six prominent Garden State trade associations on a three-year initiative to bring together key stakeholders in the state to forge a shared vision for economic growth by identifying, understanding and addressing concerns, challenges and opportunities. The group’s efforts focus on an ambitious twice-yearly “C-Suite Survey” that was conducted this past fall and will be conducted again in 2008 and 2009 by the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. The survey drew responses from nearly 150 senior executives - including their assessments of the economy, both nationally and locally, as well as their opinions about New Jersey's business climate. In December 2007, business, academic and governmental representatives gathered at the New Jersey Economic Policy Forum to learn the results of the survey. The results indicated that accessibility, location, workforce, education system and health care were among the key advantages of doing business in New Jersey. Among the disadvantages of doing business in New Jersey, cost of housing, living, tax levels, and local and state regulations were cited.  View the survey results: http://www.njchamber.com/Images/Events/njepf/njepf.pdf

New Jersey Economic Development Authority (EDA) Offers New Low Interest Loan to Nine Urban Centers: Earlier this month, the EDA launched a new loan product called Urban Plus, which provides up to $3 million for projects in nine key urban centers of the state. Urban Plus provides financing for medium-size projects in Atlantic City, Camden, East Orange, Elizabeth, Jersey City, Newark, New Brunswick, Paterson and Trenton.

Urban Plus loans can be made for as long as 10 years and can fund up to 50 percent of total project costs. Projects must create or maintain jobs, increase ratables or leverage public financing. For additional information about Urban Plus, contact EDA at 609-777-4898.


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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