Assembly Speaker Albio Sires packaged the session as "Fighting for Working Families," but the legislative initiatives merely represent much of organized labor's legislative agenda.

A-706/A-713 (Weinberg, Friscia) would effectively eliminate the ability of state and county governments to contract with private or nonprofit entities for government services. The measures would require any subcontractor to provide exactly the same services and pay employees the same salaries and benefits as the government agency that currently provides the service. Obviously, these requirements would eliminate any savings to taxpayers that subcontracting would otherwise provide.

The goal of these bills is to make subcontracting too expensive for governments to consider. Government managers need the flexibility to cost-effectively manage their workplaces. Both measures passed by only two votes each. For more information, contact Art Maurice at amaurice@njbia.org or ext. 247.

A-2958 (Friscia) would effectively strip employers of their right to respond to union-organizing drives. The bill would require any nonunion company with a state contract or grant to prove that none of those funds are used to oppose efforts to unionize its workplace. Since most companies deposit all monies into one company account, it would be impossible for them to meet this burden of proof, especially businesses like hospitals and nursing homes that have a high percentage of government-related income. A-2958 would force companies either to remain neutral to organizing drives or to give up their state contracts. This is an attempt by unions to use state law to eliminate competition from qualified nonunion contractors. The bill passed by a vote of 45 to 11. For more information, contact Jeff Stoller at ext. 209 or jeffstoller@njbia.org.

A-2948 (Guear) would impose harsh criminal penalties on employers who knowlingly fail to pay the appropriate minimum wage. Under the bill, a single violation involving as little as $501 could be punishable by up to five years in prison. Other violations could get you as much as 10 years in prison. Beyond a failure to pay the minimum wage, these penalties apply to a wide range of wage and hour violations. Wage violators deserve a penalty, but equating underpayments with violent crimes is a gross overreaction. This measure was approved by one vote. For more information, contact Jeff Stoller at ext. 209 or jeffstoller@njbia.org.

Unemployment Benefits Expansion Risks Future Payroll Tax Hike
In a last minute maneuver during the marathon budget voting session on July 1, a costly expansion of Unemployment Insurance (UI) benefits that will jeopardize the fiscal integrity of the UI fund was enacted. Unless the economy gets better, New Jersey employers could face an increase in payroll taxes.

The bill, A-3702 (Sires, Roberts)/S-2587 (Kenny), would pay most UI recipients more money in benefits and appropriate $325 million from the fund to help balance the state's budget. These changes would drain a UI fund that has already dropped from $3.5 billion to below $2 billion over the last two years.

State law requires the fund to keep a minimum balance to ensure payment of future unemployment benefits. If the fund's balance drops below that minimum, payroll taxes paid by both employers and employees automatically increase. To avoid an imminent tax hike, the bill reduces the minimum balance or "trigger" to $1.3 billion. However, reducing the trigger does not improve the financial condition of the fund. If the economy does not improve and contributions to the UI fund do not increase because of expanded economic activity, a payroll tax increase may result in the future.

The expansion of UI benefits has already been rejected twice by the Senate Labor Committee. Some of the provisions of that bill, S-1489 (Sweeney), however, were then added to legislation appropriating $325 million for uncompensated charity care, which was necessary to balance the state budget. The NJ Department of Labor estimates that the measure would drain an additional $100 million a year from the fund.

For more information, contact Frank Robinson at ext. 225 or frobinson@njbia.org.

Environmental Regulatory ReformBills Win Legislative Approvals
The Senate and Assembly in June approved several NJBIA-backed environmental bills designed to facilitate compliance with environmental regulations and expand use of brownfields programs. Here is a rundown:

SCR-61 (Bennett, Codey)/ACR-153 (Gusciora, Cohen, Corodemus) would provide more funding for employers for underground storage tank removal by allowing the state to tap into an underused fund reserved for cleaning up hazardous substance discharges. Currently, the State Constitution prohibits the state from distributing Corporation Business Tax (CBT) revenues dedicated to hazardous waste remediation for underground storage tank removal. The concurrent resolution would amend the Constitution to allow for up to one-third of the dedicated CBT funds to go to underground storage tank projects. The Constitutional amendment will be voted on in the November general election.

A-2585 (Gusciora, Greenwald, Sarlo, Watson-Coleman)/S-1714 (Bennett, Adler) would streamline the state's site-remediation programs, making it easier to turn abandoned or underutilized industrial properties into facilities for job-creating businesses. The bill would require the NJ Department of Environmental Protection (DEP) to complete its mapping of large areas of historic fill within nine months; enter digital data on aquifer contamination in the geographical information system faster; and respond to certain funding requests sooner. The bill now goes to the Governor for consideration.

S-235 (Suliga, McNamara) would make it easier to dredge the New York and New Jersey Harbor by providing for the cost-effective disposal of dredge spoils. Dredging the Harbor allows for larger ships to enter the Port of New York and New Jersey, making it an important asset to the state's economy. The bill would allow dredged materials to be used as landfill cover or for contaminated site remediation or construction fill, provided that the use of the dredged materials is otherwise consistent with provisions of federal and state laws. The bill now heads to Governor McGreevey.

For more information, contact Jim Sinclair at ext. 236 or jsinclair@njbia.org.

Congress Backs Changes to Over-Time Rules
A federal Department of Labor (DOL) proposal to update the rules governing overtime payments won narrow approval in the US House of Representatives on July 12. The proposal is the first substantive update of the nation's overtime provisions since 1949.

The current regulations are vague and outdated, making it hard for employers to classify workers. This has lead to lawsuits, mostly involving the status of well-compensated, high-level workers such as engineers, pharmacists and loan officers. According to the DOL, about 644,000 workers would lose their right to overtime wages under the proposal.

The proposed rules would clarify which positions require overtime payments and which are simply salaried employees. The changes reflect the realities of the modern workplace, including the fact that supervisors often perform a variety of exempt activities while engaged in managerial functions.

Telephone Tax Is Out, BEIP Funding Is In as NJ Budget Wins
Final Approval
Lawmakers gave final approval to funding for payments under the Business Employment Incentive Program (BEIP) and rejected a last minute telecommunications tax that would have significantly raised operating costs for New Jersey employers. Lawmakers met over a weekend to craft a budget that could be enacted prior to the July 1 deadline. Negotiations culminated in a 28-hour marathon voting session that ultimately produced a $24 billion spending plan fueled with $600 million in new taxes and fees.One of the taxes not enacted was a proposed telecommunications tax. The bill, A-3712 (Watson-Coleman)/S-2668 (Bryant), would have taxed each telephone line almost $11 per year and applied the tax to every phone extension within a business. NJBIA successfully lobbied against the proposal, arguing that it would fall disproportionately on the business community. New Jersey businesses are already paying an additional $1.5 billion in taxes as a result of the Corporation Business Tax increase enacted last year.

Legislation funding BEIP payments for this year and guaranteeing future funding with bonds issued by the NJ Economic Development Authority (EDA) passed both houses July 1. Under the NJBIA-backed bill, S-2669 (Littell, Kenny)/A-3705 (Sires, Guear, Fisher), any year in which the Legislature does not appropriate BEIP funding, the EDA would provide the payments through contract bonds. The bill would eliminate the possibility of the state reneging on its BEIP obligations in the face of some future budget crisis.

BEIP is one of the state's most effective economic development programs. Participating businesses receive payments for creating at least 25 new jobs. The payments can equal as much as 80 percent of the state income taxes generated by the new employees. Since no payments are made to the employer until the new employees work one full year, the program pays for itself.

For more information, contact Art Maurice at amaurice@njbia.org or ext. 247.

Enough is Enough!
Support NEW JOBS and Start Fighting Back Today
Billion dollar tax increases, higher fees and more regulations. Some of the people who are running state government these days have no idea what it takes to run a business. What's worse, they don't care. Every day, more business people are saying, "Enough is enough. It's time to fight back." You can too.

Support NEW JOBS, the New Jersey Organization for a Better State, the political action committee for the business community. Your financial contribution will help elect probusiness legislators, defeat antibusiness politicians, and send a message that we are not going to take it anymore!

But we can't do it alone. We need your help. Your contribution of $2,500, $1,000, $500, $250 or even $100 is vital if we are to elect probusiness candidates and defeat antibusiness politicians. So act today. Fill out the form at the bottom of the page and send it in with your check.

The stakes couldn't be higher. Just last year, in the middle of the recession, the anti-business politicians stuck it to us-they raised taxes by $1.5 billion. They taxed your business even if you lost money. They said you were not paying your fair share.

And, it's only getting worse. Anti-business politicians are pushing for new laws that will drive up your payroll taxes, raise your health insurance costs, and impose paid family leave.

The labor unions and radical environmentalists are betting that you won't do anything; that you will sit there and let them gain the upper hand. Help us prove them wrong. Join us in saying "ENOUGH IS ENOUGH!"

Contribute to NEW JOBS. It will take only a minute. But it will help stop the anti-business politicians who are making it harder and harder to operate a business in New Jersey.

To learn more about NEW JOBS, contact Jim Sinclair at ext. 236 or jsinclair@njbia.org.

Legislative Leaders Pitch Party Themes and Issues before 500 Employers at ELC Dinner
Three of the state's top four legislative leaders promoted their party's accomplishments on business issues at the June 17 Employer Legislative Committees (ELCs) Dinner, trying to convince the 500 business leaders on hand that their party had the right ideas for strengthening the economy.

All 120 seats in the Legislature are up for grabs on November 4. Democrats hold a narrow majority in the Assembly and the state Senate is tied at 20 seats apiece. Republican Senate Co-President John Bennett, Assembly Speaker Albio Sires, and Assembly Republican Leader Paul DiGaetano all touted the issues they hope will make their party successful on Election Day. Unfortunately, one of the scheduled speakers, Democrat Senate Co-President Richard Codey, did not attend.

Speaker Sires said Assembly Democrats had done their best to advance a probusiness agenda, despite the handicap of dealing with one of the most severe fiscal crises since World War II, which has led to three consecutive budget deficits totaling $14 billion. Despite the budget deficit, the fiscal year 2004 budget will include about $2.5 billion in infrastructure funding. Sires said Assembly Democrats also championed the cause of funding for Business Employment Incentive Program payments and will restore $8 million in science and technology grants. He said Democrats also tempered any advancement of paid family leave legislation.

Sires pledged to tackle the thorny issue of healthcare mandates that contribute to the soaring cost of employer-paid health insurance. He pledged to post NJBIA-backed legislation creating a Healthcare Mandates Advisory Commission for an Assembly floor vote. Such a commission would evaluate the cost and impact of legislatively imposed healthcare mandates before they are voted on.

Assembly Republican Leader Paul DiGaetano, meanwhile, took Democrats to task for the $1.6 billion Corporation Business Tax (CBT) increase enacted last year and for what he called a "decidedly antibusiness agenda in the State House." Not only did employers get hit with a massive tax increase, he said, but Democratic leaders vilified them, implying that business owners were tax cheats and not paying their fair share.

DiGaetano pointed out that companies that are losing money and laying off workers have unfairly been forced to pay more money in taxes. "Without the employers, there is no economy," DiGaetano said. "And that is an idea that has been missing in Trenton." He pledged to work on an economic stimulus package and make government live within its means.

Senate Co-President John Bennett came out swinging. He said it was "painfully clear" that Governor McGreevey had led New Jersey in the wrong direction.

Bennett criticized the Governor for increasing spending during a fiscal crisis, and called his hike in business taxes "foolishly choosing a short-term quick fix over the long-term economic well being of our state." And Bennett said Governor McGreevey has seven new taxes on the table that will fuel what he called "another round of tax and spend budgets," while Republicans wanted to cut spending. "Tax and spend is not part of our plan," he said.

If Republicans seize control of the state Senate, Bennett pledged to allow the CBT increases to expire at the end of 2005. He also promised that no paid family leave bill would pass a Republican-controlled Senate.

"When Republicans do win control, we will hang a new sign on the State House, that by the way is printed and ready to go, simply stating 'New Jersey is open for business,'" Bennett said.

Personal Service and a Big Business Attitude Make North Haledon's Extel a Growing Company in a Lagging Industry
Extel Communications is a telecommunications company that has been growing while the telecommunications industry has been faltering. Extel works with cutting edge technology but emulates the customer service that telephone companies provided 25 years ago.

And even though it's a small business, Extel President Tom Riche says "we act an awful lot like a big business."

That philosophy is paying off for Extel, which installs telephone and telecommunications systems for businesses, local governments, schools and colleges. Sales jumped 20 percent in 2002, topping the $5 million mark. The rapid growth forced the 25-employee company out of its Ridgewood headquarters and into a new larger building in nearby North Haledon.

On July 10, Riche and General Manager Jim Black opened the doors of their new office building and told their story to Senator John Girgenti as part of NJBIA's Site Visit program, which puts legislators in touch with local businesses so they can learn more about companies in their area and the issues those companies face.

For Riche, the key to Extel's success has been a combination of personal service and well-trained personnel.

"We bring the view that we want to look like what the telephone company looked like before Judge Green got a hold of it (and deregulated the industry in the 1980s)," Riche said. "We've picked up the traditional telephone service that you had before."

Riche and his staff should know. Most of Extel's employees at one time worked for Verizon, AT&T, and the old Bell Telephone Company (the Extel name refers to ex-telephone company).

For Extel customers, that means one stop shopping. When Extel customers call, they don't get computerized message menus; they talk to a person. Extel's project managers oversee the various contractors and technicians, follow a job through from start to finish, and train the customers' employees in the use of the new phone system. They even offer pointers on the best way to answer the phone.

Personalized service alone isn't enough. The people providing that service must have the expertise to deliver the quality that customers demand. Extel invests heavily in technical training for its technicians, and takes advantage of government job training programs.

Keeping up with the advances in technology is a never-ending battle.

To help meet that demand, the company won a customized training grant from the state of New Jersey. It allowed them to train eight technicians, two managers of operations, two managers of cabling, and three project managers. For Extel, it's all part of building a better team.

"Our company is very much like a football or baseball team. You can get people in the draft and bring them along over time, or you can go through the free agent market," Black explained. "What we've done is find people that we think have the talent we are looking for and bring them in and grow them."

Extel is also building the farm team. The company recently took on two high school interns as part of a program run by the state's Workforce Investment Board. The program is designed to give high school students real business experience so they have an idea of what will be expected of them when they enter the workforce.

Successful as Extel has been, the company faces the same struggles as other small businesses. The cost of health insurance is skyrocketing and few entry-level workers have the skills the company needs.

When company officials look at some of the proposals coming out of Trenton, they just shake their heads in disbelief. Such antibusiness legislation makes it harder for the small businesses that are providing jobs and strengthening the economy.

"A small business is not easy to run anymore in terms of keeping up the cash flow and turning a profit," Riche said. "I don't know if we make a lot of money; but we are keeping a lot of people employed."

NJBIA Leads Trip to Join President Bush at New Jersey
Tax Cut Event
NJBIA arranged for more than 100 of its members to join President George W. Bush on June 16 at an event in Elizabeth promoting his tax cut package. Members who are involved in NJBIA policy committees and Association affiliates, like the Women's Business Leaders Network, attended. NJBIA worked closely with the White House to organize the event.

The President talked about the benefits of his tax package, particularly to small business. The new tax cut, signed into law in late May, allows small businesses to deduct up to $100,000 in expenses for new equipment (up from $25,000). It also cuts income tax rates, which will lower taxes for small businesses organized as S corporations, LLCs and partnerships. Bush praised small businesses, saying, "I want to herald the entrepreneurs.."

Melanie Willoughby Joins NJBIA Staff
Melanie Willoughby, the long-time president of the NJ Retail Merchants Association (NJRMA), joined NJBIA in June as senior vice president for government affairs. Willoughby succeeds Philip Kirschner, who became president of the Association on April 1. She will be responsible for the management of the Association's government affairs department.

Before joining NJBIA, Willoughby served for 18 years as president and CEO of the NJRMA, the statewide retail business organization representing over 3,500 stores with over 75 percent of the state's retail sales. Prior to joining the New Jersey Retail Merchants Association, Willoughby was assistant vice president for marketing at NJBIA.

"I am very pleased to welcome Melanie back to the Association," Kirschner said. "As our head of the government affairs department, she will oversee the work of our talented staff of eight lobbyists and be our chief contact with the state Legislature. She will work to ensure that the interests of our 20,000 members are protected in the legislative process."

Quote of the Month
"Without employers, there is no economy. That is an idea that has been missing in Trenton."

Wednesday, September 24
NEW JOBS 2003: A Tribute to Friends of Business
Billion-dollar business tax hikes. Sweetheart government contracts for unions. Rising healthcare costs. Business owners across New Jersey are fed up with state policies that are raising their costs and making it difficult to create new jobs. Join NEW JOBS, the state's largest and strongest political action committee for business, on September 24 from 6:00-8:00 p.m. at its premiere fund-raiser, which will be held at the Sheraton Meadowlands Hotel and Conference Center. Your purchase of a single ticket or a block of ten will help raise money needed to support probusiness legislators and defeat antibusiness politicians in the fall elections. The price is $200 per person, and sponsorships are available for $2,000. To register, call Sherry Esteves at 609-393-7707, ext. 219.

Tuesday, October 7, 2003
NEW JOBS Mercer County Legislative Reception
Employers from Mercer County will hold this special reception to help elect pro-business state legislators in this fall's elections. Proceeds will benefit the New Jersey Organization for a Better State (NEW JOBS) - the business community's leading political action committee. NEW JOBS is hosting this cocktail reception in partnership with the Greater Mercer County Chamber of Commerce. The event will be held from 5:30 p.m. until 7:30 p.m. at the Boathouse at Mercer County Park in West Windsor. Tickets are $150 per person, with $1,000 sponsorship opportunities for interested businesses. NJBIA encourages its Mercer County members to support this important event. This is your chance to help elect legislators who support employers and understand their concerns. To register, or for more information, please contact Sherry Esteves at 609-393-7707, ext. 219.

Tuesday, October 21
Awards for Excellence Dinner
A select number of NJBIA member companies that have achieved excellence in activities related to environmental quality, human resources management, and job creation will receive our Award for Excellence at a dinner banquet at the Westin Princeton on October 21. An Award for Excellence in public service will also be presented to an individual. Established in 1984, NJBIA's Awards for Excellence recognize companies of every size-from the modest, family-owned enterprise to Fortune 500 companies. The program will begin at 6:00 p.m. and will include a reception, dinner and the awards presentations. The cost is $149 per person. Tables of 10 are available. To register, call Stacy Wichner at 609-393-7707, ext. 213.

Become an Awards for Excellence Dinner Sponsor! Associate your business with excellence by formally recognizing the distinguished achievements of your corporate colleagues through one of the following sponsorship opportunities.

$2,000 Gold Sponsor includes:

• Reserved table of 10,
• Recognition in the event program and signage,
• Listing in follow-up stories in the NJBIA Business Voice and New Jersey Business Magazine.