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MonthlyNewsletter November 2003 Issue
Legislative News
Election Roundup: Democrats Win Control of the State House Read.
NJBIA Poised to Fight Antibusiness Bills in the Upcoming Lame-Duck Session Read.
NJBIA-led Bonds for Business Coalition Pushes for Business Investment Policies Read.
NJBIA Comments on NJDEP's Self-Disclosure Rule Read.
NJBIA in Action
Kirschner Urges Lawyers to Speak Out on Economic Policy Read.
Meet Our Members-Mike Karlovich. ConocoPhillips Bayway Refinery Read.
Employer Legislative Committees, the Grassroots Affiliate of NJBIA Read.
Seven Companies and Two Individuals Receive NJBIA's 2003 Award for Excellence Read.
NEW JOBS Thanks You for Your Support. Read.
Employment Watch
Surge in Business Spending Propels Fast Economic Growth Read.
Quote of the Month
Joe Teti, President and CEO of Triangle Inc. Read.
Calendar of Events
Thursday, December 4-Franchise Opportunities Conference Read.
Tuesday, December 9-2003 Public Policy Forum Read.
Tuesday, February 10-Deadline for New Good Neighbor Award Nominations Read.
Democrats Win Control of State House as Party
Takes Senate and Expands Assembly Majority

New Jersey Democrats won full control of the State House in the November 4 election, securing at least a one-seat advantage in the Senate and expanding its Assembly majority by six seats. At press time, the District 4 Senate contest was undecided. Should Democrats hold on to victory there, they would enjoy a 22-18 Senate majority.

It was an impressive performance by the Democrats. The party overcame Governor James E. McGreevey's low approval ratings and defied a 40-year trend in which the Governor's party (Republican and Democrat alike) loses seats in off-year elections.

Democrats knocked off a 24-year Republican incumbent, Senate Co-President John Bennett, and defended all of its vulnerable Senate seats to grab control of an upper house that was evenly split at 20 seats apiece. They also knocked off four Assembly Republicans and recaptured two Republican seats and one Independent seat in strong Democratic Districts. Democrats will have a 47 to 33 Assembly majority in 2004.

Democrats outspent Republicans by a two-to-one or three-to-one margin and relied heavily on negative TV advertising against their opponents. Republicans tried to make the election a referendum on Governor McGreevey.

For the first time since 1991, Democrats will enjoy full control of both houses of the Legislature and the Governor's office. Republicans, meanwhile, have lost seats in every legislative election since the 1991 GOP landslide.

Whether Democrats end up with a one- or two-seat Senate majority remains to be seen. In District 4 (Camden, Gloucester), unofficial returns gave Democrat Fred Madden a mere 55-vote victory over Republican George Geist in an election where 41,000 votes were cast. Madden has declared victory but Geist is calling for a recount.

In the District 4 Assembly race, Democratic challenger David Mayer defeated GOP incumbent Steve Altamuro and running mate Patrick Dougherty. Incumbent Democrat Robert Smith won reelection handily.The lone bright spot for the GOP was in District 14 (Mercer and Middlesex County), where Republican Bill Baroni upset incumbent Democratic Assemblyman Gary Guear and where Senator Peter Inverso easily fended off a well-financed challenge from Democrat Anthony "Skip" Cimino.

Baroni was the top vote getter while incumbent Democrat Linda Greenstein squeaked by GOP challenger Sidna Mitchell by less than one percentage point.

Democrats scored perhaps their biggest victory in District 12 (Monmouth, Mercer Counties), where Democrats swept what has been for decades a strong Republican district. In the Senate race Democrat Ellen Karcher beat Bennett 52 percent to 43 percent (Green Party candidate Earl Gray received 5 percent). In the Assembly contests, Democratic challengers Robert Morgan and Michael Panter upset long-time Republican incumbents Michael Arnone and Clare Farragher.

Furthermore, Democrats recaptured the Middlesex Assembly seat of Arline Friscia, a former Democrat who switched to the GOP this spring after losing the Democratic primary.

Democrats also scored big wins in two North Jersey swing districts.

In District 36 (Passaic, Bergen and Essex counties), incumbent Senator Paul Sarlo beat back a challenge from Republican John Kelly with 53 percent of the vote. Both incumbent Assemblymen-Republican Paul DiGaetano and Democrat Fred Scalera-were also reelected.

Sarlo was a freshman Assemblyman who was appointed to the Senate seat vacated by Democrat Garry Furnari. Kelly, meanwhile, had represented the district as an Assemblyman for more than 20 years before narrowly losing reelection in 2001. He was expected to mount a strong challenge in the blue collar, Democratic-leaning district.

Similarly, in District 38 (Bergen County) popular, long-time Republican Assemblywoman Rose Heck was expected to mount a vigorous challenge to freshman incumbent Joseph Coniglio for this Bergen County Senate seat. In the end, however, Heck could not overcome the Democratic advantage in the newly drawn district and Coniglio won handily, 56 percent to 44 percent.

In the Assembly, Democrats recaptured the Assembly seat held by Heck as Democrats Robert Gordon and Joan Voss handily defeated Republicans Ed Trawinski and Lou Tedesco.


NJBIA Poised to Fight Antibusiness Bills in the Upcoming
Lame-Duck Session

With the election over, legislators will return to Trenton to finish the voting session that began in 2002. This period is called "lame duck"-the period after the election but before the newly elected legislators take office. Between now and January, NJBIA will work to stop antibusiness bills from being enacted while at the same time pushing for probusiness initiatives. Here is a rundown of the major lame-duck issues facing the business community.

Paid Family Leave. Several proposals would give different periods of paid leave subsidized by various funding schemes. NJBIA is watching A-1892 (Friscia)/S-1065 (Coniglio), which would provide eight weeks of leave paid through the employer-funded Temporary Disability Insurance (TDI) program.

Paid leave proponents have so far met with little success in passing a full-fledged program. More likely, they will push for one of several paid leave proposals that are aimed at providing only a few hours of leave at a time. NJBIA opposes legislation like A-831 (Conaway, Doria)/S-126 (Bennett, Sweeney), which would provide 24 hours of family leave time during any 12-month period for a parent or guardian of a public school child with self-defined special needs. Parents would be allowed to define their child's "special needs," which could include things like tardiness and sleepiness. The leave could be taken in hourly increments.

Labor bills. Unions have a long wish list in lame duck. Some of the union-backed bills NJBIA will be fighting include: A-713/A-706 (Weinberg, Friscia)/S-1682/S-1543 (Furnari), which would effectively ban privatization of services for local and county governments; A-2948 (Guear)/ S-2343 (Sweeney), which would criminalize wage and hour violations, subjecting employers to jail time and steep fines for payrolls that are short by as little as $501; and A-2958 (Friscia, Sarlo)/ S-2538 (Codey), which would effectively force state contractors to remain neutral in the face of union-organizing drives.

Healthcare Costs. Even as employers are coping with double-digit increases in the cost of health insurance, A-2487 (Weinberg, Johnson, Previte)/S-1520 (Vitale, Buono) would force insurers to cover unlimited substance abuse treatment and an expanded list of behavioral disorders, including caffeine addiction and "malingering." This bill has passed the Assembly Health Committee and is awaiting action in the Appropriations Committee.

Economic Development. NJBIA will be pushing for legislation to clarify a property tax exemption for business equipment. The NJ Tax Court has interpreted the Business Retention Act (BRA) in a way that denies this exemption for some of the equipment used in business. Without it, business equipment will be subject to local property taxes.Transportation Trust Fund. The Legislature also may take up reauthorization of the Transportation Trust Fund, and may consider an increase in the gasoline tax to fund it. The current trust fund can no longer support New Jersey's transportation needs for roads, highways and public transportation. NJBIA will work to ensure that the renewal meets the business community's needs.


NJBIA-led Bonds for Business Coalition Pushes for Business Investment Policies
NJBIA First Vice President Art Maurice, chair of the Bonds for Business Coalition, helped rally support on October 15 in Washington, DC, for federal legislation that could mean as much as $30 million a year in new capital investments in New Jersey. The coalition has joined a nationwide effort to rally support for HR-882 (English, R-PA) and S-756 (Thomas, R-WY), which would allow more employers to use tax-exempt bonds to expand their businesses.

More than 75 people attended a Bonds for Business congressional reception held in Washington, DC. Attending the event were six congressional representatives from New Jersey: Senator Frank Lautenberg and House members Mike Ferguson, Scott Garrett, Bill Pascrell, Donald Payne and Steve Rothman. The Coalition thanked seven New Jersey Congressmen-Rob Andrews, Ferguson, Rodney Frelinghuysen, Garrett, Rush Holt, Pascrell and Chris Smith-for cosponsoring the above-mentioned legislation.

The legislation would expand the definition of manufacturing to include high technology enterprises, increase from $10 million to $20 million the amount that can be borrowed, and allow funds to be used for ancillary facilities such as offices and distribution centers.

EDA estimates that these changes would increase the use of tax-exempt bonds by as much as 50 percent (about $30 million per year) in New Jersey.

NJBIA Comments on NJDEP's Self-Disclosure Rule
The New Jersey Department of Environmental Protection's (DEP) proposal to allow companies to self- audit and disclose regulatory violations in return for reduced penalties is a step in the right direction, but must be broader and more consistent, NJBIA First Vice President Jim Sinclair testified at an October public hearing.

The DEP proposal would provide for a substantial reduction in penalties for companies that report violations at their own place of business. Penalties could be reduced by 75 percent or eliminated altogether, depending on the severity of the violation. Major violations are not covered by the proposal. The initiative is designed to encourage companies to conduct environmental audits and correct environmental violations before they are discovered by the DEP.

NJBIA has repeatedly called on the DEP to take a more cooperative approach by helping businesses comply with regulations instead of undertaking environmental inspection raids aimed at punishing companies. By reducing penalties, DEP would encourage businesses to evaluate their own workplaces and correct environmental problems prior to formal DEP inspections.

Sinclair said the current proposal needs several changes in order to accomplish that goal. Specifically, the DEP should clarify which violations would qualify for a full penalty waiver, broaden the categories of violations for self-disclosure protection and identify the procedures to be used in determining eligibility.

Kirschner Urges Lawyers to Speak Out on Economic Policy
Creating a probusiness climate is critical to job growth and a goal the business community and the legal community should work together to promote, NJBIA President Philip Kirschner told about 250 lawyers at the Fourth Annual Business Law Symposium in Woodbridge. Kirschner was the keynote speaker at the October 9 event, which was hosted by the NJ Institute for Continuing Legal Education.

Kirschner pointed out that during this recovery, new jobs are still hard to come by. Without strong employment growth, consumers will not spend freely and the recovery will not be as strong as it could be.

Lawyers, both as business people running their law practices and as legal representatives of their clients, can play a role in changing the business climate.


Meet Our Members
This new feature will provide profiles on the people and businesses that make NJBIA one of the most dynamic organizations in the state. To learn more about what NJBIA can do for you, visit the Get Involved section.

Mike Karlovich
ConocoPhillips Bayway Refinery
Linden

"It just doesn't seem like an NJBIA event unless Mike Karlovich is there," NJBIA President Philip Kirschner says. "He has been one of our most active members for years."

Karlovich is manager of Strategic Communication for the ConocoPhillips Bayway Refinery in Linden. ConocoPhillips, an NJBIA member since 1993, is the largest refiner in the United States, and its Bayway facility is the largest refinery on the east coast.

As a member of the company's leadership team, Mike is responsible for managing ConocoPhillips' external relations programming as well as employee communications and media relations.

He also is one of NJBIA's most active members. He has participated in the Legislative Briefing Breakfast series every year since 1993 and has been to every Public Policy Forum for the last 10 years. He has represented his company at every Made in New Jersey Day event since 1998 and his company earned a New Good Neighbor Award in 1997.

He has been a member of the Union Employer Legislative Committee for 14 years (seven of them as chairman); and for the last eight years, he has been a member of the statewide ELC, of which he is currently state chairman.

He is also an active member of NJBIA's policy committees and affiliates. Mike has served on the Government Affairs Committee for ten years and on the Energy Council for seven. He has also worked to make New Jersey a more business friendly state as a member of the Board of Trustees of the political action committee NEW JOBS, the New Jersey Organization for a Better State.

Mike likes the personal contacts and the interaction that active membership provides. "After all, people make the world go 'round, and NJBIA helps me stay grounded on issues of importance to running the Bayway Refinery," he says.

While he can cite many benefits of being involved, it was an event in 1994 that Mike remembers best. In Washington, D.C. for swearing-in ceremonies for the new Congress, Mike met up with then-NJBIA President Joe Gonzalez.

Mike only had one event scheduled and was planning to return to New Jersey when Gonzalez asked if he would like to make the rounds with him.

"He introduced me to every member of the New Jersey delegation and a host of leaders from the business and labor communities as well as many of the state legislators who were there," Mike says. "We watched the swearing-in from the office of Rep. Bob Franks with the Congressman's father and mother. We had a great time that day, and I will never forget Joe's kindness."

Employer Legislative Committees The Grassroots Affiliate of NJBIA
Get involved! Your business can't afford not to be.

"There is no better place than the ELCs for business to communicate its message."

Dennis Bone, President
Verizon New Jersey

Don't you wish you could sit down and talk directly to the people who make the laws in this state? Well you can. Come out to one of our 18 Employer Legislative Committee (ELC) meetings.

Every month, businesspeople just like you speak directly with state legislators and other policy leaders. They meet informally in small groups over breakfast or lunch, making it very easy to get your point across. The meetings only last about 90 minutes and there are no membership fees or other obligations, only the cost of your meal. With 18 ELCs throughout New Jersey, chances are there is a meeting near you.

Take the time to attend an ELC. You'll be glad you did.

To learn more, contact Celeste Jordan at 609-393-7707, ext. 223, or cjordan@njbia.org or Go Here.

Seven Companies and Two Individuals Receive NJBIA's 2003 Award for Excellence
The New Jersey Business & Industry Association celebrated the many good things New Jersey employers do at its annual Awards For Excellence Dinner on October 21, presenting its Award for Excellence to seven companies and two individuals. Two other companies received Honor Roll Awards.

The Awards program recognizes NJBIA member companies for outstanding achievements in job growth, environmental protection, and human resource management. One or more individuals are also recognized for service to their communities. More than 250 people attended the event, which was held at the Westin Princeton at Forrestal Village.

"This is a celebration of all that is good about New Jersey business," NJBIA President Philip Kirschner said. "Our members create jobs and strengthen our economy. They provide health insurance and other benefits for their employees. They find innovative ways to protect our environment. They devote their time and effort to serve their communities."

Every year, NJBIA honors a select group of employers from among its thousands of members for excellence in three categories: Environmental Quality, Outstanding Employer (human resource management) and Enterprise (job creation). The Public Service Award is presented to individual business professionals for community service.

An independent panel of judges reviews the nominations. This year's judging was conducted by 20 members of the Princeton and Newark Chapters of the Service Corps of Retired Executives (SCORE) along with three NJBIA policy committee chairs: JoAnn Trezza, Human Resources Committee; Edward Hogan, Environmental Quality Committee; and Tim Carden, Economic Development Council. WithumSmith+Brown, the New Jersey-based accounting and consulting firm, verified the information supplied by the finalists.

NJBIA Salutes its 2003 Awards for Excellence Winners
Enterprise Award
icarz, inc. of Newton
John Wiley & Sons of Hoboken
Environmental Quality Award
Merck & Co., Inc. of Rahway
Seaboard Point in North Wildwood, a joint project of Sadat Associates, Inc.; Lomax Morey Consulting; Ballard Spahr Andrews & Ingersoll, LLP; Cooper Levenson; and K. Hovnanian Companies.
Valero Refining Company-New Jersey of Paulsboro
Outstanding Employer Award
Cendant Corporation of Parsippany
Meridian Health of Neptune
Public Service Award
Anthony Gentile
PSE&G, Cranford
V. Peter Traphagen, Sr.
NJ Society of Certified Public Accountants (NJSCPA), Roseland
Honor Roll
Enterprise Award

NJ Institute of Technology of Newark
Outstanding Employer
Wegmans Food Markets of Princeton
Thanks to Our Sponsors

Gold Sponsors
Cendant Corporation
Langan Engineering and Environmental Services, Inc.
MasterFoods USA, a Division of Mars, Inc.
Meridian Health
NJM Insurance Group/NJM Bank FSB
PNC Bank
PSE&G
Valero Refining Company-NJ
Wachovia

Silver Sponsors
Conectiv
ConocoPhillips Bayway Refinery
Lowenstein Sandler P.C.
Merck & Co., Inc.
Micro Stamping Corporation
NJ Economic Development Authority
New Jersey Resources Corporation
OceanFirst Bank
Sprint
Van Note-Harvey Associates


NEW JOBS Thanks You for Your Support.
NEW JOBS, the New Jersey Organization for a Better State, set out to make a statement this year. As New Jersey's largest and most influential business political action committee, we wanted to send a message to the antibusiness politicians.

Thanks to our many NEW JOBS contributors, we did just that. On behalf of the members of the NEW JOBS Board of Trustees, I thank you for your generous contributions throughout this contentious election cycle.

Our campaign has been a success:

  • NEW JOBS has raised a record amount of money this year. We have eclipsed all previous election years in contributions collected and contributions made.
  • NEW JOBS gave a record amount of political contributions to Democratic and Republican probusiness candidates, focusing on the most competitive districts.
  • Seventy-seven of the 90 probusiness candidates (86 percent) endorsed by NEW JOBS won on Nov. 4.
  • In the targeted districts, NEW JOBS sent e-mails and special mailings to the business community urging support for endorsed candidates.
The business community has said, ENOUGH IS ENOUGH! And we have backed it up with action. Our effort has been strong and visible. And we owe it all to you. Whether you contributed $100 or the maximum amount of $7,200, you have done your part to help make New Jersey a better state. For that, we at NEW JOBS thank you.
Jim Sinclair
Executive Director

P.S. If you did not participate this year, don't think it's too late. NEW JOBS is an ongoing political action committee that remains active throughout the year. To find out what you can do to help elect probusiness candidates to the state Legislature, go to www.newjobspac.com or contact me at 609-393-7707, ext. 236.


NEW JERSEY EMPLOYMENT WATCH
Surge in Business Spending Propels Fast Economic Growth

The fastest economic expansion in 19 years, a surge in business spending, fresh signs that manufacturing is rebounding, and continued modest job growth in New Jersey all point to the start of a period of sustained economic growth for the Garden State.

Joel Naroff, chief economist with Commerce Bank, said he is confident this will not turn out to be yet another false start.

"The economy has shifted gears, and we should be in good shape for quite some time," Naroff said recently, commenting on the nation's 7.2% surge in Gross Domestic Product in the third quarter, the biggest three-month increase since 1984.

The most encouraging news to come out of the Commerce Department's GDP report was that business spending drove much of the nation's third quarter growth. Until recently, consumer spending had carried the economy, and business spending had lagged.

Business spending on new equipment and software rose at a 15.4 percent annual pace in the third quarter, the fastest since the first quarter of 2000. This followed an 8.3 percent rise in comparable business spending in the second quarter. With corporate inventories depleted, many companies will have to hire more workers and pick up the pace of production to keep up with renewed demand.

Investments in computer and other high-tech equipment rose by an 18.3 percent annualized rate in the third quarter, the same as the second quarter. Spending on equipment outside of the high-tech sector grew by 12.5 percent.

"This is very good news for America's manufacturing base," said David Huether, chief economist with the National Association of Manufacturers. "It signals that a broad-based strong cyclical recovery-essential for a meaningful rebound in manufacturing output and employment-has finally arrived."

In terms of job growth, at least, New Jersey is among a handful of states that have outpaced the nation. In the first nine months of 2003, the state's private sector employers added 26,500 new jobs. (See chart above.)

The US economy, following a long period of waning employment, added about 250,000 private-sector jobs in August, September and October.

Looking ahead, Rutgers University economist Joe Seneca, chairman of the Governor's Council of Economic Advisors, said New Jersey could be expected to create about 40,000 new jobs in 2004.

By historical standards, the current rate of job creation in New Jersey is modest. It is below the postwar average of 50,000 new jobs a year and well below the late 1990s mark of 90,000 new jobs a year.

Most of the new jobs in the first nine months of this year have come from the service sector (28,400) and construction (5,800), according NJ Department of Labor data released in October.

Employment in the state's manufacturing sector has continued to fall, though at a slower rate of decline. In the first nine months of this year, manufacturers cut 7,700 jobs in New Jersey. Since the start of the state's manufacturing recession in January 2001, close to 70,000 factory jobs have been lost.

It remains to be seen if the recent upturn in manufacturing orders and sales will be enough to drive employment higher, but recent reports from the Federal Reserve Banks of New York and Philadelphia offer hope that job losses will continue to diminish.


Quote of the Month
"We understand the significance of the legislative elections. We need to make our voices heard and get people into office who will help us."

Joe Teti
President and CEO Triangle Inc.


Thursday, December 4
Franchise Opportunities Conference

Budding entrepreneurs who want to pursue the American dream of owning and operating a business in New Jersey through franchising should come out to this Franchise Opportunities Conference at the Newark Museum, 49 Washington St., which will be held Thursday, Dec. 4, from 8:30 a.m. to noon. Participants will include representatives of Buttercup Bake Shop, Cendant Corporation, The Goddard School, Rita's Water Ice and Subway. The event is sponsored by the New Jersey Economic Development Authority and the New Jersey Commerce & Economic Growth Commission in conjunction with the International Franchising Association and the New Jersey Business & Industry Association. Cost is $35 per person. To obtain a registration form, more information or directions, visit www.njeda.com/franchiseconference or call Judy Wilkinson at 609-341-2065.


NJBIA Presents...
2003 Public Policy Forum

New Jersey at the Crossroads...Creating Jobs in a Post-Recession Economy
Tuesday, December 9, 2003
Sheraton at Woodbridge Place, Iselin
7:45 a.m. - 2:00 p.m.
Go here to see program details and names of speakers

February 10 DEADLINE!
Have Your Development Project Nominated for a New Good Neighbor Award!NJBIA's 44th Annual New Good Neighbor Awards competition is underway. If you have built a new or renovated commercial facility within the last two years, your project probably qualifies for nomination. The nominating deadline is February 10, 2004. You may contact Katie Wittkamp for further information at kwittkamp@njbia.org or 609-393-7707, ext. 239.


 
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