NJBIA Chief Government Affairs Officer Christopher Emigholz took issue on Wednesday with a progressive group’s call for higher taxes on corporations, noting New Jersey businesses already pay a higher share of the total tax burden in this state compared to businesses in other states.
In an op-ed in the New Jersey Globe, Emigholz rejected New Jersey Policy Perspective’s arguments in support of the governor’s proposed 2.5% Corporate Transit Fee that, if enacted, would raise corporate businesses taxes to a top rate of 11.5% – the highest in the nation.
Emigholz said the “myopic mantra of holding corporations accountable to pay their fair share” ignores the fact that New Jersey corporations now pay 45.3% of the total tax burden in New Jersey, while businesses elsewhere collectively pay about 40% of their state’s tax burden.
According to a recent report from the Council on State Taxation (COST), New Jersey businesses collectively paid $34.1 billion in state and local taxes in FY22, Emigholz noted.
“When New Jersey businesses are the only state in the nation in the top tier of the four major business taxes, we can affirmatively say they are paying well beyond their fair share,” Emigholz said.
Go here to read Emigholz’s entire op-ed.
Ten New Jersey institutions collectively received $404 million in grants and contracts for biomedical research from the National Institutes of Health (NIH), which directly supported 5,136 jobs and $1.32 billion in economic activity in the state during FY23.
The data comes from United for Medical Research (UMR), a coalition of leading research institutions, patient and health advocates and private industry members that advocate for increased NIH funding.
The top NIH funded research institutions and companies in New Jersey in FY23 included:
- Rutgers Biomedical & Health Sciences (RBHS) – Cancer Institute of New Jersey
- Rutgers University
- Princeton University
- Hackensack University Medical Center
- PsychoGenics, Inc., a Paramus-based contract research organization (CRO) specializing in central nervous system (CNS) focused preclinical and translational drug discovery
- Coriell Institute for Medical Research, a leader in biobanking and biomedical research based in Camden
- Theradex Systems, Inc., a leading global contract research organization based in Princeton that has extensive expertise in oncology clinical development
- Rowan University
- New Jersey Institute of Technology
- Kessler Institute for Rehabilitation
There are 4,322 biopharmaceutical businesses in New Jersey and 104,514 employees, according to the Biotechnology Industry Association’s 2022 annual report.
New Jersey Economic Development Authority CEO Tim Sullivan joins Steve Adubato to examine New Jersey’s cultural ties to East Asia, our economic infrastructure, and closing the gap between childcare and the workforce.
Andrew Drechsler, a financial executive with over 25 years of experience in the life science industry, has been named to the Manasquan Bank Board of Directors, effective April 24.
“Andy’s exceptional financial acumen and experience in leading successful life science companies will undoubtedly bring invaluable insights and expertise to our board,” said James Vaccaro, chair, CEO and president of Manasquan Bank.
“His commitment to the bank’s market area only serves to enhance this strategic addition to the board. We are thrilled to have him and look forward to working together to continue driving growth and success for the bank,” Vaccaro said.
Drechsler currently serves as a consultant to development-stage pharmaceutical and biotech companies that are in their startup phase. Previously, he was the CFO of Provention Bio, which was later acquired by Sanofi in 2023.
He has also served as the CFO of Insmed Incorporated, VaxInnate Corporation and Valera Pharmaceuticals, where he played a large role in securing financial transactions and overseeing operations.
“I’m honored to join Manasquan Bank’s Board of Directors and be a part of an organization that values community involvement as much as I do,” Drechsler said. “As a lifelong Monmouth County resident, I’ve always admired the bank’s commitment to serving its local community, and I look forward to contributing my experience and expertise to help continue building on Manasquan Bank’s 150-year legacy of stability and service excellence.”
Drechsler holds a bachelor’s degree in accounting, graduating magna cum Laude from Villanova University. He is also a board member of the NJ Chapter of the Juvenile Diabetes Research Foundation (JDRF).
Instead of raising corporate taxes in New Jersey to a top rate of 11.5%, the state should ratchet down its CBT rate over the next five years to the national average of between 5% and 6%, according to the nonpartisan research group The Garden State Initiative.
In an op-ed published Tuesday in the Asbury Park Press and other USA Today Network publications, GSI President Audrey Lane noted the consequences of New Jersey’s antibusiness climate. One-third of the Fortune 500 companies headquartered in New Jersey have left between 2006 and 2021, she said. The number of Fortune 500 companies based in New Jersey has fallen from 22 to 15 over that time span, she said.
The governor’s plan to raise the corporate income tax rate from 9% to 11.5% by enacting a new 2.5% corporate transit fee on large companies will only make matters worse, she said. Moreover, the governor’s rush to enact the tax by June 30 is concerning.
“It’s important to note the estimated $818 million the tax will generate annually, most of which will go to NJ TRANSIT, will be on top of the new 15% fare hike that the NJ TRANSIT board passed last week and automatic 3% annual fare hikes,” Lane wrote. “Regrettably, both the fare hikes and the tax hike are being pushed through before a comprehensive study of the agency’s finances and recommendations is complete.”
GSI said New Jersey needs to be more regionally competitive with neighboring states if it wants to stem the loss of large businesses and the jobs they provide residents. The group said the proposed reduction in the CBT rate could be paid for by repealing write-offs and exemptions that now reduce CBT collections by 20%.
Lane said that GSI is ready to work with NJBIA and other business groups to fight any legislative attempts to raise the top CBT rate and “be part of a real reform movement that changes how New Jersey does business.”
“If that doesn’t happen, more companies are going to grow and expand their business somewhere other than New Jersey,” Lane said.
Go here to read the entire GSI op-ed.
Through their Manufacturing Counts partnership, NJBIA and NJMEP announced Tuesday that the annual State of the State of Manufacturing Summit will take place at the Statehouse on May 20, starting at 9:30 a.m.
The summit will include a Hill Day, exhibit areas, a Legislative Manufacturing Caucus meeting and more, followed by a networking event at nearby Cooper’s Riverview.
The event, which brings together industry leaders, stakeholders, STEM firm executives and lawmakers to discuss ways to improve the climate for New Jersey’s manufacturing industry. There is no cost to attend.
“We are looking forward to hosting the State of the State of Manufacturing Summit at the Statehouse, as part of our continuing efforts to address the needs and concerns of our manufacturers with policymakers,” said NJBIA President and CEO Michele Siekerka.
“Manufacturing is a crucial industry for New Jersey’s economy, with workforce, regulatory and cost challenges providing continuing headwinds. We thank the legislators, partners and attendees who will be on hand for this event to discuss how we can advance manufacturing in New Jersey.”
“We are excited about the potential this year’s State of the State of Manufacturing Summit holds under NJBIA’s leadership,” said NJMEP CEO Peter Connolly. “NJMEP remains committed to supporting our manufacturing sector and we look forward to seeing how NJBIA’s advocacy and lobbying strengths will further elevate the industry’s profile among New Jersey’s legislators.
“It’s a fantastic opportunity to continue pushing forward the important conversations and initiatives that drive our industry. The Manufacturing Counts partnership between NJBIA and NJMEP will allow us to work together to ensure manufacturing can thrive here in New Jersey.”
Last month, the New Jersey Manufacturing Extension Program (NJMEP) announced the transition of the State of the State of Manufacturing Summit to NJBIA in a strategic effort to amplify the influence of New Jersey’s manufacturing sector and foster a more business-friendly environment.
This initiative builds on NJMEP’s achievements in elevating the industry’s voice to the pinnacle of state leadership and cultivating a dynamic community of manufacturing leaders, thereby bridging the engagement gap that existed prior to the summit between the state and its manufacturers.
Recognizing the need for enhanced advocacy, NJMEP handed the reins of the event to NJBIA, whose robust lobbying capabilities for decades in manufacturing and dedication to a pro-business climate are seen as key to propelling this conversation forward.
“NJBIA’s DNA, dating back 114 years, is in manufacturing,” said NJBIA Chief Government Affairs Officer Christopher Emigholz. “We are committed to integrating the manufacturing sector’s interests into our advocacy to provide meaningful change that will not only benefit our manufacturing community, but New Jersey’s economy at large.”
In 2022, NJBIA and NJMEP entered into a formal agreement to unite, broaden and strengthen the support of manufacturing businesses throughout the state.
Under that Manufacturing Counts partnership, NJBIA vowed to coordinate efforts and resources to bolster advocacy, collaboration and visibility for the industry.
To register for the 2024 State of the State of Manufacturing Summit, click here.
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Former State Treasurer and tax expert Andrew Sidamon-Eristoff recently penned an op-ed for NJ Spotlight News that shows exactly why the governor’s proposed $1 billion-plus “corporate transit fee” tax on corporations will drive away large companies considering locating in New Jersey.
Written in the form of a memo to a fictional company – described as a subsidiary of a diversified multinational conglomerate considering moving its headquarters to New Jersey – Sidamon-Eristoff role-plays as a consultant tasked with evaluating the tax implications of the move. Other locations that “Investco” is mulling are in North Carolina, Viriginia and New York.
The memo points out a 2.5% Corporate Transit Fee on top of New Jersey’s existing 9% Corporation Business Tax would make the Garden’s State’s corporate tax rate 11.5% – by far the highest in the nation.
“Setting aside non-tax business considerations, we cannot recommend that Investco place its North American headquarters in New Jersey,” the memo states.
The memo further explains:
“Other states offer comparable logistical, geographic, workforce talent and other advantages at considerably lower corporate tax cost. For example, North Carolina imposes a 2.5% flat tax, Virginia’s top rate is 6%, and New York state’s top rate is 7.25%. The surcharge would accentuate an already significant tax differential between New Jersey and its competitors.”
The memo notes New Jersey uses single-factor sales apportionment, meaning that if “Investco” had $56.1 million in income apportioned to New Jersey it would owe $5 million in corporate taxes at the current 9% CBT rate. If the 2.5% corporate transit fee is enacted on top of the 9% tax, the tax bill would rise another $1.4 million.
The consultant also notes that New Jersey has a “poor history of following through on its policy commitments to its corporate taxpayer community, which as you appreciate places a high value on stability and certainty especially when making long-term investment.”
The memo says New Jersey is about to extend a temporary 2.5% surcharge on the business community for the second time and make the 11.5% top rate permanent. By comparison Virginia’s 6% statewide corporate tax has been stable for a half century.
The consultant concludes:
“Tax incentives for development and job creation/retention might impact the analysis at the margin, but New Jersey’s primary incentives are temporary, limited in scope and subject to significant conditions. In any event, we can reasonably anticipate that rival states will take pains to remain competitive with New Jersey on incentives.”
To read the entire op-ed, go to NJ Spotlight’s website here.
The New Jersey Small Business Development Center is advising businesses to beware of scams involving emails that fraudulently use the official logos America’s SBDC, the Small Business Administration and the NJSBDC.
Official emails from these agencies only originate from addresses ending in @njsbdc.com, @americassbdc.org, or @sba.gov. Emails are also legitimate if they originate from the 10 NJSBDC regional centers if they use institution-specific email addresses, such as @njcu.edu, @brookdale.edu, etc.
Do not respond to emails unless they originate from legitimate email addresses because they may be phishing attempts designed to steal information, such as bank account and routing numbers.
“The perpetrators of this scam are targeting individuals in the community, including NJSBDC staff, clients, and the public, with fraudulent emails,” the NJSBDC said in a recent announcement. “Be cautious of any emails claiming to be from these organizations that do not use the aforementioned email addresses.”
Anyone who receives a suspicious email or has concerns about its authenticity is asked to please report it immediately to info@njsbdc.com.
The state is holding two employer information sessions in May about its long-delayed “pilot launch” of the state-run retirement savings program for private employers’ workers. NJBIA is also holding an online session in May about its alternative retirement solution.
The state program was authorized by a 2019 state law that, once fully implemented, will require that businesses with 25 or more employees provide an automatic payroll deduction for either the state-run retirement plan or another qualified one established for their employees. Businesses with 25 or more employees that fail to comply could face financial penalties.
NJBIA is offering its members an alternative if they don’t want to join the state-run plan. NJBIA’s retirement solution is a Multiple Employer Plan (MEP), which allows businesses to join together to access customizable fiduciary-managed retirement plans.
James O’Donoghue, a chartered retirement plan specialist with BCG Securities, has scheduled a one-hour webinar on the NJBIA Retirement Solution at 11 a.m. on May 14. O’Donoghue will explain the difference between NJBIA’s MEP and the state plan, as well as answer questions on which one is the best fit for NJBIA members.
The state’s RetireReadyNJ plan is overseen by a seven-member Secure Choice Savings Board and administered by the investment firm Sumday, a subsidiary of Vestwell State Savings. There will be two information sessions about RetireReadyNJ at 2 p.m. on May 9 and at 11 a.m. on May 22. Both sessions about the pilot program cover the same information.
At the state’s upcoming information sessions, the executive director of the state’s plan, Todd Hassler, will give an overview of the pilot RetireReady NJ program, including employer responsibilities, employer benefits, and the major action steps for employers and their employees.
State officials said RetireReadyNJ is expected to fully launch sometime this summer.
To register for NJBIA’s May 14 webinar on the NJBIA Retirement Solution, go here.
To register for the state’s May 9 information session on the state-run plan, go here.
To register for the state’s May 22 information session on the state-run plan, go here.
NJ TRANSIT’s board may have approved a 15% fare increase proposal this week, but that and a $1 billion-plus Corporate Transit Fee on business proposed by Gov. Phil Murphy as part of his FY25 budget are all happening without a full explanation for agency’s needs.
As reported in the Bergen Record this week, a study analyzing how to best restructure the agency – announced just about a year ago – has only just begun.
So, fare hikes and other tax increases are essentially all going to NJ TRANSIT without a roadmap looking back or a plan looking ahead, said NJBIA Chief Government Affairs Officer Christopher Emigholz.
“With such an influx of funding, both occurring and proposed, it is entirely appropriate to ask why this increase is needed, why is it needed now, what is the money going toward, where can cost savings be found and which increase will have the least and most impact on our economic growth,” Emigholz said.
OFF THE RAILS
The board for NJ TRANSIT approved a 15% fare hike on Wednesday, with annual 3% increases occurring indefinitely thereafter. It is the first fare hike for NJ TRANSIT in more than nine years.
During his FY25 budget proposal, Gov. Murphy shocked New Jersey’s largest employers and the business community at large by calling for a permanent 2.5% Corporate Transit Fee, retroactive to Jan. 1.
The CTF would return New Jersey to its national outlier status of having the largest top corporate tax rate (11.5%) in the nation – after the governor had vowed for more than a year to sunset a 2.5% corporate business tax surcharge.
But in addition to all that, the governor has also approved a new gas tax and toll hikes to fund transportation, and proposed a new tax on trucks each time it leaves a warehouse.
“We also have billions of dollars more coming from the federal infrastructure law,” Emigholz explained.
“With that, it’s really incumbent upon the state to provide our taxpayers and ratepayers a transparent review on how we’ve gotten here and a holistic plan, with details on cost-savings, rather than just increasing costs for the sake of increasing costs.”
NJ TRANSIT budget documents do predict a nearly $1 billion annual budget shortfall next year. But some wonder if all of these new revenues are necessary now.
TRACKING DAMAGE TO NJ BUSINESSES
While that’s concerning, Emigholz said if Murphy’s CTF is approved in the FY25 budget, it is doing a major disservice to New Jersey corporations and competitiveness among other states.
“On top of the fact that our competing regional states are either lowering or maintaining their top corporate taxes, this is basically a massive 20% business tax increase that wouldn’t even be needed now – and at a time where we have a multi-billion-dollar surplus,” Emigholz said.
“Rather than following through on a promise to sunset a 2.5% surtax, we’re starting a new one that will be both a cash-tax increase and a major hit to a company’s balance sheet and stock value – instead of allowing these job creators to invest more in their businesses and employees this year.
“Further, CBT is a very volatile revenue, one of the must unstable revenue sources in the New Jersey state budget,” Emigholz added. “And there really is no nexus between the CBT and transportation. For all these reasons, we will be urging the Legislature to reject Gov. Murphy’s proposal that keeps New Jersey as a national outlier for business taxes.”
NJBIA has submitted comments to the state Department of Environmental Protection stating concerns about a proposed rule updating Groundwater Quality Standards (GWQS) for Class II-A groundwater.
As the DEP uses GWQS as base standards for remediation of groundwater contamination, NJBIA Deputy Chief Government Affairs Officer Ray Cantor said the toxicity data used in setting the new standards was “inconsistent and questionable,” and that certain limits were not attainable and/or based on based on analytical methods for drinking water, instead of groundwater.
“We strongly support environmental policies that are protective of human health because a clean and healthy environment is an essential component of a prosperous economy,” Cantor wrote.
“Toward these ends, we are firm supporters of the state’s site remediation programs as it has developed throughout the years. As a result of these programs, thousands of previously contaminated sites have been remediated and put back into productive use.
“We are concerned that the rules will result in absurd outcomes, such as when GWQS are set at levels that are below drinking water quality standards (DWQS). This is exactly the type of regulatory standards the Legislature proscribed the DEP from implementing.”
Of the 65 contaminants subject to the proposed rule, 50 will have GWQS that are more stringent. Of those 50, seven will be more stringent by an order of magnitude or more.
The remediation standard for a contaminant becomes more stringent by an order of magnitude when that standard is decreased by a factor of 10.
“The impacts of these rules will be real and could be pervasive,” Cantor added. “These changes, especially the order of magnitude changes, will negatively impact development and redevelopment. Such changes should not be made unless necessary.
“Unfortunately, the Department has not provided clear and unambiguous science with this proposal. While the enhanced protections that such order of magnitude changes will achieve will have minor enhancements to the protection of human health, they may be greatly outweighed by the burdens of reopening of numerous cases and the uncertainty that this will place on the marketplace.”
Cantor further recommended that the rule not be adopted in its current proposed form and that extensive stakeholdering be performed before an amended rule is adopted.
To see Cantor’s full comments, click here.
The number of undergraduates who earned degrees fell (-2.8%) in 2022-2023, the second annual decline in a row following many years of gradual increases, according to the latest nationwide research released this week by the National Student Clearinghouse.
However, more U.S. adults earned a postsecondary certificate in 2022-23 than in any of the last 10 years. That growth in certificate earners is made up entirely by a 6.2% increase in those earning their first-ever award in 2022-2023. Over the past two academic years, there has been a 13.1% increase in those earning certificates.
Over half (51.7%) of the growth in first-time certificate earners were 18-20-year-olds (+11.3%). By comparison, first-time associate degree completers in the same 18-20-year-old age demographic saw a meaningful decline (-4.7%).
Although the number of certificate-holders was up (+3.9%), fewer U.S. students earned an associate degree in the 2022-23 academic year than in any of the last 10 years. The number of bachelor’s degree earners declined to the lowest level since 2015-16.
Compared to the prior academic year, there was a 3.0% decline in those earning bachelor’s degrees in 2022-23 and 7.3% decline in those earning associate degrees.
The NSC also broke some of the data down by state. New Jersey followed the national trend with a 3.6% drop in bachelor’s degree earners and an even steeper decline (-14.7%) in associate degree earners.
Nationally, major fields of study that had a year-over-year increase in bachelor’s degree earners were Computer Information and Sciences (+4.3%) and Psychology (+1.6%).
Declines in bachelor degree earners were noted in Health Professions and Related Clinical Services (-4.5%); Engineering (-3.5%); Education (-2.6%); Biological and Biomedical Sciences (-1.5%); Social Sciences (-4.0%); Journalism, Communications and Related Programs (-9.0%); Business, Management, Marketing, and Related Support (-2.2%); and Visual & Performing Arts (-0.4%).
Go here to access the data released on Thursday by the National Student Clearinghouse Research Center, which works with higher education institutions, states, districts, high schools, and educational organizations to better inform practitioners and policymakers about student educational pathways.
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