Republicans in the state Senate and Assembly lost their majorities in the November election, ending ten years at the controls. Before the new Legislature was sworn into office, however, the outgoing Legislature held a marathon session on January 7 to pass a flurry of bills before the new leadership took over. Here is a look at how the business community's legislative agenda fared in the hectic final days of the 209th Legislature.

Self-Insurance for Small Businesses-Acting Governor Donald T. DiFrancesco signed legislation on January 7 that would allow small businesses with two to 50 employees to join together through associations to provide employee health benefits by self-insuring. The measure, A-3943 (Myers)/S-2458 (Cardinale), will make self-insurance for health benefits an option for thousands of small employers.

Many small employers do not have enough employees to make self-insurance feasible. The new law will allow small businesses to take advantage of the cost-savings some large companies enjoy in providing their own health coverage. For many companies, self-insurance provides an affordable, quality alternative to traditional benefit plans provided by third party insurers.

With the cost of health benefits increasing at an average annual rate of approximately 10 percent, employers need to use every tool at their disposal to provide the best benefits at the lowest costs. By allowing small businesses to reap the benefits of self-insurance, New Jersey will help make health insurance more affordable for small businesses.

The law is the second such measure adopted by the Legislature this year. In August, DiFrancesco signed legislation, A-1315 (Myers, Augustine)/ S-2436 (Matheussen), allowing small businesses to band together to negotiate group health plan discounts. For more information, contact Bryan Markowitz at ext. 225 or bmarkowitz@njbia.org.

Corporation Business Tax Reform-Legislation that would eliminate a tax penalty on companies with New Jersey facilities and payrolls was pulled from the list of bills to be voted on before the January 7 voting session, effectively killing the bill at the 11th hour. A-3420 (DeCroce, Gibson)/S-2314 (Kyrillos, Kenny) would have reformed New Jersey's Corporation Business Tax (CBT) by instituting what is known as the "single sales factor." Assembly Speaker Jack Collins, who cancelled the vote, said the legislation would be too costly at a time when the state is running a budget deficit.

Under current law, the CBT formula is based on businesses' property, payroll and sales in New Jersey. As a result, the more New Jersey-based employment and property a company has, the more New Jersey tax it pays. This formula benefits corporations with sales in New Jersey but no payroll or facilities here.

Instituting a single sales factor would eliminate the property and employment factors when determining a company's share of New Jersey business taxes and base the CBT strictly on New Jersey sales. New Jersey businesses would no longer be penalized for contributing to New Jersey's economy by creating jobs and investing in capital improvements. For more information, contact Art Maurice at ext. 247 or amaurice@njbia.org.

Health Plans for Self-Employed- Legislation that would create an additional, more affordable health plan for the self-employed received final legislative approval on January 7 and was signed into law by DiFrancesco a short time later.

S-13 (Matheussen, Sinagra)/A-3447 Vandervalk, Gregg) will create a new standard health plan that offers basic healthcare coverage to those self-employed individuals who cannot afford the current high-priced plans. Offering basic benefits in a plan that is not as comprehensive creates another option for those looking to purchase healthcare coverage and will help reduce the number of uninsured in New Jersey.

Antitrust Exemption for Physicians-The Assembly on January 7 gave final legislative approval to a bill that would allow doctors and dentists to join together to negotiate higher fees from insurance plans by exempting them from New Jersey's antitrust laws. DiFrancesco signed the measure into law a short time later.

SCS-1098/1033/A-2149/A-464/A-2241 promotes anti-competitive practices that would result in higher health benefit costs for every healthcare consumer. If any other group of employers attempted to band together to negotiate higher prices with vendors, they would be in violation of antitrust law and prosecuted. Healthcare providers should not be allowed to do what other employers cannot do. For details, contact Bryan Markowitz at ext. 225 or bmarkowitz@njbia.org.

Paid Family Leave-Legislation that would have made New Jersey the first and only state in the nation to mandate 12 weeks of paid family leave to the parents of newborns did not pass.

S-1923 (Sinagra, Lynch) and A-3049 (Friscia) would have made both female and male parents of newborns and adopted children eligible for 12 weeks of unemployment benefits, in addition to maternity leave and any other time off employees might already be entitled to.

Opposition to this government mandated paid leave program was NJBIA's top priority. Most firms, especially small ones, cannot afford to operate with employees absent for prolonged periods of time. These employers must also absorb the cost of paying a substitute worker for the employee on leave or pay coworkers increased overtime to share the expanded workload.

Senate Announces Committee Cochairs
Democratic Senate Leader Dick Codey and Republican Senate Leader John Bennett recently announced their cochairs for the state Senate committees.

The Senate committees and their cochairs are:

Budget and Appropriations-Democrat Wayne Bryant and Republican Robert E. Littell;
Commerce-Democrat Byron M. Baer and Republican Gerald Cardinale;
Community and Urban Affairs-Republican Leonard T. Connors and Democrat Ronald L. Rice;
Economic Growth, Agriculture and Tourism-Republican Martha W. Bark and Democrat Raymond J. Lesniak;
Education-Republican Robert J. Martin and Democrat Shirley K. Turner;
Environment-Republican Henry P. McNamara and Democrat Joseph Suliga;
Health, Human Services and Senior Citizens-Republican John J. Matheussen and Democrat Joseph F. Vitale;
Judiciary-Democrat John Adler and Republican William L. Gormley;
Labor-Democrat Joe Charles and Republican Leonard Lance;
Law and Public Safety and Veterans Affairs-Democrat John Girgenti and Republican Peter A. Inverso;
State Government-Democrat Garry J. Furnari and Republican Walter J. Kavanaugh;
Transportation-Republican Andrew R. Ciesla and Democrat Nicholas J. Sacco.

Assembly Committee Chairs Announced
One day after Assembly Democrats were officially sworn into office, Assembly Speaker Albio Sires on January 9 released the new Assembly committees and their chairs for the 2002-03 Legislature. The new committee chairs will set the agenda for the Assembly Democrats as they assume the majority for the first time in a decade. The new Assembly committees and their chairs are:

Agriculture and Natural Resources Committee-Robert J. Smith of Gloucester County;
Appropriations Committee-Bonnie Watson-Coleman of Mercer County;
Banking and Insurance Committee-Neil M. Cohen of Union County;
Budget Committee-Louis D. Greenwald of Camden County;
Commerce and Economic Development Committee-Donald Tucker of Essex County;
Consumer Affairs and Regulated Professions Committee-Nilsa Cruz-Perez of Camden County;
Education Committee-Joseph V. Doria, Jr. of Hudson County;
Environment and Solid Waste Committee-Reed Gusciora of Mercer County;
Family, Women and Children's Services Committee-Mary Previte of Camden County;
Health and Human Services Committee-Loretta Weinberg of Bergen County;
Homeland Security and State Preparedness Committee-Joan M. Quigley of Hudson County;
Housing and Local Government Committee-Gerald Green of Union County;
Judiciary Committee-Linda Greenstein of Middlesex County;
Labor Committee-Arline Friscia of Middlesex County;
Law and Public Safety Committee-Peter Barnes Jr. of Middlesex County;
Military and Veteran Affairs Committee-Jack Connors of Camden County;
Regulated Professions and Independent Authorities-Anthony Impreveduto of Hudson County;
Regulatory Oversight-William D. Payne of Essex County;
Senior Issues-Craig Stanley of Essex County;
State Government-Alfred E. Steele of Passaic County;
Telecommunications and Utilities-Wilfredo Caraballo of Essex County;
Tourism and Gaming-Gary Guear of Mercer County;
Transportation-John Wisniewski of Middlesex County.

Five Governors In Eight Days
The 20-20 Senate and a quirk in New Jersey's State Constitution gave New Jersey residents five Governors between January 7 and January 15.

As required by the State Constitution, Senate President Donald T. DiFrancesco served as acting governor in the absence of Governor Christie Whitman, who resigned in February.

DiFrancesco's term ended at 11:59 a.m., Tuesday, January 8, making Attorney General John Farmer acting governor for a couple of hours until the new Senate was sworn into office that afternoon.

With the Senate evenly split between Democrats and Republicans, neither party can lay claim to the Senate President position. Republican Leader John Bennett and Democratic Leader Dick Codey agreed to split the Acting Governor's duties by each serving three and a half days. On January 15, James E. McGreevey was sworn into office as the new Governor for a term of four years.

Bush Revokes Blacklisting Rule
The Bush Administration in late December revoked Clinton-era regulations that expanded the requirements for contractors seeking to bid on public contracts. The so-called "blacklisting" regulations would have barred contractors from participating in public contracts if they had any past labor and environmental penalties lodged against them.

Critics said the regulations were too broad. They would have included companies with minor or technical violations or that merely had unproven allegations lodged against them. The rules had the potential to impact 300,000 contractors handling up to $200 billion in government work annually.

Trade Promotion Authority Bill Advances
The US Senate Finance Committee recently approved a bipartisan Trade Promotion Authority (TPA) bill that would give the President more power to negotiate international trade deals with other nations. The bill would bar Congress from amending trade treaties that are brought to the floor for ratification. Congress would only be able to vote yes or no on the treaty as negotiated by the President.

The committee's bill differs slightly from a measure passed by the House of Representatives on December 6, giving hope that a consensus bill might receive final approval in 2002.

The absence of TPA since 1994 has hampered US efforts to open foreign markets. With one-third of this country's economic growth over the past decade coming from exports and 12 million US jobs supported by exports, renewal of TPA is vital to taking advantage of new global opportunities.

Increased exports have been one of the driving successes behind New Jersey's economic growth. Final approval of TPA legislation would help expand foreign markets for New Jersey's goods, contributing to continued economic growth and prosperity in the state. TPA is essential to preserving a free and open trading system, and the economic well being of New Jersey, its companies and its workers, especially in this time of economic contraction.

Revised Economic Stimulus Package Stalls
A revised economic stimulus package stalled in the US Senate after passing the House of Representatives by a 224-193 vote on December 19. In an effort to break the Senate log jam, House members scaled back tax cuts and added $25 billion in additional unemployment benefits.

The move was not enough to satisfy the Senate, however. Senate Majority Leader Tom Daschle (D-SD) refused to bring it up for vote before the holiday recess.

The differences between the White House and the Senate over the stimulus bill have sharpened in the first week of 2002 as President Bush and Daschle both argued their points in separate speeches. The package is designed to help pull the economy out of a yearlong economic slowdown exacerbated by the September 11 terrorist attacks.

In its current form, the bill would speed up a planned reduction in income taxes, dropping the 27 percent tax rate to 25 percent. It would also allow companies to write off investments more quickly, would repeal key elements of the corporate minimum tax, and would give $300 checks to workers who did not benefit from the summer tax-cut. The bill also contains a 13-week extension of unemployment benefits and a voucher program to help unemployed workers buy health insurance.

Senate Approves Paperwork Relief Act
The US Senate on December 18 approved the "Small Business Paperwork Relief Act of 2001," making it easier for small businesses to meet federal regulatory and paperwork requirements.

S. 1271 (Voinovich, R-OH/Lincoln D-AR) would require the director of the Office of Management and Budget to publish in the Federal Register and make available on the Internet an up-to-date list of compliance assistance resources for small businesses. It also requires each agency to establish one point of contact in the agency as a liaison to small businesses.

If You Want to Get Involved in the Political Process,
Join One of 18 Employer Legislative Committees in NJ
With 21 freshman legislators and new leadership in state government, it is vitally important that businesspeople get involved in the governmental process. The Employer Legislative Committees (ELCs) offer busy employers an excellent opportunity to meet informally with their legislators and talk about the issues that concern them.

Legislators are responsible for the laws on taxes, healthcare, environmental regulation, human resources and hundreds of other issues. No legislator-no matter how dedicated, intelligent, or hard working-can be expected to understand the intricacies of every one. They rely on people in the various industries to tell them what impact their decisions have on employers.

"Nothing makes a bigger impression on a legislator than hearing directly from their constituents," ELC Executive Director Philip Kirschner said recently. "The ELCs also give employers an opportunity to network and to get regular reports on what is happening in Trenton."

ELCs are independent, county organizations that hold monthly meetings over breakfast or lunch with legislators and other government officials. There are no dues. Since these meetings take no longer than 90 minutes, they are tailormade for today's busy schedules. For more information about your county's ELC, please contact Shelia Woods at 609-393-7707, ext. 222, or contact your County ELC chair.

For a list of this month's speakers, go here

ELC MEETING TIMES

Atlantic ELC-8:30 a.m., fourth Tuesday of the month at Blue Heron Pines Golf Club in Cologne. Contact Chair Sharon Gordon at 609-965-6060.
Bergen ELC-8:00 a.m., second Tuesday of the month at the Radisson Inn in Paramus. Contact Chair Robert Senatore at 201-767-2849.
Burlington ELC-8:00 a.m., third Tuesday of the month at the Golden Dawn Diner in Edgewater Park. Contact Chair Jerry Mitzner at 856-489-2437.
Camden ELC-8:00 a.m., second Tuesday of the month at Ponzio's in Cherry Hill. Contact Lendel Jones at 856-672-2751.
Cumberland-Cape May ELC-8:30 a.m., second Tuesday of the month at Larry's II Restaurant, Vineland. Contact Chair Deborah Ayars at 856-692-2984.
Essex ELC-noon, third Tuesday of the month at the Essex County Country Club in West Orange. Contact Chair Robert Roberti at 973-344-6131. Gloucester-Salem ELC-noon, third Friday of the month at the Holiday Inn Select in Bridgeport. Contact Chair Steve Wright at 856-589-8300, ext. 244.
Hudson ELC-noon, second Wednesday of the month at Puccini's Restaurant in Jersey City. Contact Chair Ulises Diaz at 201-457-7967.
Hunterdon ELC-8:00 a.m., fourth Wednesday of the month at Beaver Brook Country Club in Clinton. Contact Chair George Ditzler at 908-788-7900.
Mercer ELC-noon , first Friday of the month at Marsilio's Restaurant in Trenton. Contact Chair Cathy Frank-White at 609-393-4143.
Middlesex ELC-8:00 a.m., second Wednesday of the month at the Sheraton Edison Hotel Raritan Center in Edison. Contact Chair Lorelei Mottese at 732-906-5153.Monmouth ELC-8:00 a.m., second Friday of the month at the Holiday Inn in Tinton Falls. Contact Chair Mary Pat Angelini at 732-663-1800, ext. 15.
Morris ELC-noon, third Wednesday of the month at the Zeris Inn in Mountain Lakes. Contact Chair Jim Watkins at 973-660-5027.
Ocean ELC-8:00 a.m., second Tuesday of the month at the Woodlake Country Club in Lakewood. Contact Chair Julie Strout at 609-656-2600.
Passaic ELC-8:00 a.m., third Tuesday of the month at the Holiday Inn in Totowa. Contact Chair Angelo Morresi, Esq., at 973-239-5626.
Somerset ELC-noon, fourth Friday, at Acqua Restaurant in Raritan. Contact Chair Joanne Jaeger through ELC Coordinator Shelia Woods at 609-393-7707, ext. 222.
Union ELC-noon, last Wednesday of the month at L'Affaire restaurant in Mountain-side. Contact Chair Michael Karlovich at 908-523-6041.
Warren-Sussex ELC-8:00 a.m., fourth Tuesday of the month at Centenary College in Hackettstown. Contact Chair Robert Peabody through ELC Coordinator Shelia Woods at 609-393-7707, ext. 222.

Job Losses Continue as State and NationSettle into First Recession in a Decade
New Jersey and the nation continued to lose jobs in November as the economy settled into its first re-cession in a decade, a contraction that is widely expected to continue at least through the middle of next year.

The National Bureau of Economic Research, the arbiter of the nation's economic cycles, recently declared that the US economy entered the recession in March. The organization also said the terrorist attacks of September 11 "clearly deepened the contraction."

In New Jersey, an already significant loss of jobs was compounded in November with the disappearance of 8,300 private-sector jobs, the second largest loss in eight months. Three thousand seven hundred jobs were lost in the manufacturing sector and 4,700 in the service sector.

Since April 2001, 24,400 private-sector jobs have vanished in New Jersey, a decline of about one percent. Virtually all of the net loss has occurred in the manufacturing sector, which has shed 25,299 jobs since the start of the year, a decline of 5.5%.

It is likely that the state's service industries would also be in negative territory for the year were it not for the destruction of the World Trade Center, which sent an exodus of 15,000 jobs from downtown Manhattan into New Jersey in the weeks following the terror attacks. As of November, the state's service industries had eked out an 11-month gain of 1,400 jobs.

Employment in the construction industry has remained mostly stable, ending November with an 11-month loss of just 400 jobs.

Regional economists generally expect the recession in New Jersey to be shallow and short-lived, especially when compared to the last recession. New Jersey saw the loss of a quarter of a million jobs between 1989 and 1992, one of the worst employment contractions on record.

Today, New Jersey is in a far better position to weather a recession. The state economy suffers none of the imbalances or excesses of a decade ago, such as bloated corporate middle management and rampant real estate speculation.

New Jersey also benefits from a tremendously diversified industry base. Manufacturing, for example, now accounts for only one out of every eight jobs in the private sector, compared with one in two jobs during manufacturing's heyday in the 40s and 50s.

Judged by its unemployment rate alone, New Jersey remains in better shape than the nation as a whole. The state jobless rate dipped to 4.7% from 4.8% in November, one whole percentage point below the national rate of 5.7%.

The downturn in New Jersey is nonetheless serious, with two-thirds of the 1,600 companies participating in NJBIA's 2002 Business Outlook Survey reporting in September that they were either in a recession or heading into one. The collective outlook of individual companies for sales, profits and employment in the year ahead has fallen to the lowest level in eight years, the survey found. Falling sales and profits are forcing many companies to cut expenses.

Quote of the Month
"Penalizing companies that make investments and provide jobs while rewarding companies that make no investments in New Jersey is just
plain dumb."

NOMINATE YOUR NEW CORPORATE NEIGHBOR FOR AN AWARD
The 42nd Annual New Good Neighbor Awards competition sponsored by NJBIA recognizes organizations that have worked to bring about an improved business climate in New Jersey by building or renovating a commercial facility. Winners will be chosen based on economic benefit and job creation, architectural merit, and community involvement. The nominating deadline is February 11, 2002. If you need further information or would like a nomination form, please call Lisa Figatner at 609-393-7707, ext. 239.

TUESDAY, FEBRUARY 12
Making E-Business Work for You
NJBIA, along with the Manufacturing Institute of the National Association of Manufacturers (NAM) is cosponsoring this half-day seminar called "Making E-Business Work for You." The seminar is targeted to representatives of small- to medium-sized manufacturing companies. The Manufacturing Institute, which is the research arm of the NAM, has already run similar programs in Ohio and Pennsylvania. You can register online at www.nam.org/ebizseminar.

WEDNESDAY, FEBRUARY 27
HR 101 - A Beginner's Seminar on Managing Your Workforce
This program, new for 2002, is a "crash course" in the key human resource issues faced by New Jersey employers. Small business owners and first-time HR managers will have a special interest in hearing experienced labor attorneys and veteran personnel executives discuss the basics of managing employees. You'll learn how companies with limited resources can successfully avoid costly mistakes in the treacherous world of employment law. The event will be held at the Sheraton at Woodbridge Place in Iselin. Cost is $99 per person for NJBIA members and $129 for nonmembers. To register, contact Lisa Figatner at 609-393-7707, ext. 239.

SPRING 2002, LEGISLATIVE BRIEFING BREAKFASTS
Continuing an annual spring tradition, NJBIA will travel across the state to host a series of six Legislative Briefing Breakfasts. These breakfasts give you the chance to meet with legislators in your district and learn about pending and proposed legislation affecting your business. Each breakfast will begin at 7:30 a.m. with registration and end promptly at 9:30 a.m. so you can get back to work. NJBIA's Briefing Breakfasts provide excellent opportunities to network with colleagues and legislators in an informal atmosphere. The cost is $35 per person per breakfast for NJBIA members and $45 for nonmembers. Call Sherry Esteves at 609-393-7707, ext. 219, for dates and locations.

TUESDAY, MAY 14
NEW JOBS South Jersey Legislative Reception
Sponsored by NEW JOBS, the NJ business community's largest political action committee and the Chamber of Commerce Southern NJ, this event is South Jersey's regional fund-raiser for probusiness candidates for the state Legislature. Remember, it is important to support candidates who advocate economic growth! This reception will be held at The Mansion on Main Street in Voorhees from 6:00 p.m. until 8:00 p.m. The cost is $175 per person. To register, call Sherry Esteves at 609-393-7707, ext. 219. For details on NEW JOBS, contact Executive Director Jim Sinclair at ext. 236 or jsinclair@njbia.org.

TUESDAY, JUNE 11
New Good Neighbor Awards Luncheon
NJBIA's 42nd Annual New Good Neighbor Awards Luncheon will be held at the Sheraton at Woodbridge Place in Iselin. Awards will be presented to New Jersey businesses that have made an outstanding contribution to their communities through job creation, the quality of their architecture, and community involvement. The luncheon will be held from 11:30 a.m.-2:00 p.m. Cost to attend is $55 per person. For details, contact Sherry Esteves at 609-393-7707, ext. 219. Sponsorships are available.

Rapid Finder Payroll Tax Deduction Tables
This publication lists and combines New Jersey and federal tax deductions for employers with weekly pay periods. This all-in-one guide calculates tax deductions for five separate tax tables: Federal Social Security Tax, Federal Medicare Tax, New Jersey Gross Income Tax, Unemployment Insurance, Workforce Development Partnership Fund and Temporary Disability Insurance Taxes, and Federal Personal Income Tax. The Federal Withholding changes that go into effect on January 1, 2002, are included in this publication. Prices: NJBIA members $25 (plus 6% NJ sales tax), nonmembers $35 (plus 6% NJ sales tax).

To order this and other NJBIA publications, call Dawn Miller at 609-393-7707, ext. 224.