The Governor's plan would increase the tax rate for income over $500,000 from the current 6.37 percent to 8.97 percent, a 29 percent increase. The plan would raise $800 million a year in new tax revenues.

This income tax increase would come on top of several other proposed tax changes that, if enacted, would increase business taxes by hundreds of millions more. What's worse, the Governor is proposing tax hikes at a time when revenue collections are running significantly higher than anticipated.

NJBIA believes that State government should reduce spending before raising any taxes. The budget Governor McGreevey proposed in February would increase State spending by 9 percent over last year, increasing the total budget by $2.2 billion. The Governor could have taken less than half of this increase and dedicated it to property tax relief, instead of hiking taxes by $800 million.

The income tax increase would also add to an already hostile tax environment for business. (The State doubled the CBT in 2002). It would discourage some businesses from moving to New Jersey or staying here.

Furthermore, businesses have been paying the same high property taxes as homeowners, but under McGreevey's plan they would not benefit from the State's property tax relief program. NJ SAVER rebates and other property tax relief programs go only to homeowners, not to businesses.

The proposed "millionaire's tax" is just the latest in a series of anti-business tax provisions in the proposed budget that the Legislature will consider this spring.

In February, the Governor proposed suspending for another two years the ability of C corporations to deduct net operating losses (NOLs) sustained in unprofitable years from income realized in profitable years. He also proposed the disallowance of a capital investment incentive that allows small businesses to deduct up to $100,000 of the cost of new equipment on their State tax returns. Finally, he proposed decoupling from the federal bonus depreciation, meaning New Jersey businesses would not be able to take the 50 percent depreciation bonus for capital investment on their State tax returns that is currently allowed on their federal returns.

NJBIA has objected repeatedly to these proposals. The NOL suspension would renege on a promise made to the business community in 2002, when NOLs were originally suspended, that they would be restored in 2004. And businesses should be encouraged to purchase new equipment and invest in their New Jersey operations. Upgrading computers, modernizing plant operations, and purchasing new equipment helps to stimulate economic development, create jobs and make New Jersey companies more competitive.

With State tax revenues now expected to surpass initial projections, NJBIA believes the Legislature should be able to meet spending needs without continuing to raise taxes on the business community. For more information, contact Art Maurice at ext. 247 or amaurice@njbia.org.

"On behalf of everyone at NJBIA, I offer my sincere thanks to each and every one of our members for making us the largest state-level employer association in the nation," NJBIA Chairman Bart Luedeke said. "This achievement is a testament to all the hard work and professionalism of the staff at NJBIA and the value of what the Association does for members."

NJBIA President Philip Kirschner attributed the rapid growth rate to the fact that NJBIA fights for New Jersey employers in the State Legislature and with State agencies, offers outstanding seminars to help employers with everything from managing their workforces to complying with environmental regulations, and offers outstanding member benefits.

"We are proud of the fact that so many employers value NJBIA membership enough to not only join our organization in the first place, but to remain members year after year," Kirschner said. "We have seen an astounding rate of growth, much of which occurred during difficult economic times when many businesses were forced to cut costs to survive."

NJBIA Senior Vice President Melanie Willoughby said NJBIA is an effective lobbying organization because it maintains a member-driven agenda. Eleven policy committees made up of hundreds of employers meet regularly to examine legislation.

"Our policy committees give us the ammunition we need to pursue a pro-jobs agenda in Trenton," Willoughby said. "We can go to a lawmaker and say 'this bill might look good on paper, but this is what it will do in the real world.'"

Similarly, NJBIA offers numerous programs and publications designed to give businesses a competitive edge, according to First Vice President Michele Glassburg, who directs the Association's marketing department.

In 2004 alone, NJBIA has held seminars on complying with environmental regulations, reconciling State and federal family leave laws, and participating in the State's school construction program, among others. NJBIA also offers useful publications such as its Practical Guide to New Jersey Employment Law, the NJBIA Compensation Report, the new NJBIA Employee Benefits Report and the ever-popular Directory of the 211th New Jersey Legislature.

"These programs and publications provide employers with practical information on running their businesses, managing their workforces and complying with State laws and regulations," Glassburg said. "This is our effort to give NJBIA members that extra edge that will make them even more successful."

The bill, S-1001 (Codey), would require any nonunion company to prove that no government funds are used to oppose efforts to unionize its workplace.

S-1001 would force companies either to remain neutral to organizing drives or to give up their government contracts. This bill is really an attempt by unions to use State law to eliminate competition from qualified nonunion employers.

The bill would end all existing State and local financial assistance to current recipients at the end of 2004, reneging on agreements that businesses and governments have already made. This would apply to tax abatements, workforce training grants, Economic Development Authority loans, Business Incentive Employment grants, and dozens of other programs.

If an employer receives even one dollar of government assistance thereafter, it would then have to meet a series of costly conditions on any future agreements, including:

• a convoluted formula that could force businesses to pay an average annual salary of as much as $59,600 to every worker they employ;
• a mandate that total company employment could not drop below 90 percent of the pre-assistance level for at least five years; and
• a five-year limit on assistance.

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

The bill, A-747 (Cohen), would provide a tax credit of up to 25 percent of an employer's health insurance costs at businesses with up to 25 employees. The credit would be limited to not more than 50 percent of a company's total tax liability and could not reduce that tax payment below the minimum corporate tax of $200. The bill now goes to the Assembly Appropriations Committee.

NJBIA strongly supports this bill, having called for tax incentives for employers who provide health benefits in its new Public Policy Principles and Priorities. Affordable health insurance is the most important issue for NJBIA member companies, and this legislation can provide some much needed financial relief.

NJBIA members with 2-19 employees responding to the Association's Health Benefits Survey reported paying an average of $6,797 per employee for health insurance last year.

In fact, the survey indicates that health insurance costs have soared by a compound rate of 53 percent for all New Jersey employers in the last four years. For more information, contact Christine Stearns at ext. 260 or cstearns@njbia.org.

NJBIA President Philip Kirschner, delivering the results of NJBIA's Health Benefits Survey.

"This system runs my company," Miles explained during an April 22 NJBIA Site Visit with State Senator Martha Bark and Assemblyman Larry Chatzidakis. "And this is what we do for our customers. We wrote this system from scratch."

Miles doesn't want customers thinking that they will be forced into using any one system. He's not a believer in "industry software that pens you into their business system."

Every program that Miles Technologies writes begins with an understanding of the customer's business system. The program is then created line by line to fit that system, rather than force the system into a generic computer program.

This approach has put Miles Technologies on the road to success. Chris Miles formed Miles Technologies in 1997 with no outside capital and little more than his business vision and computer expertise to trade on. Today, Miles Technologies is a $3-million-a-year operation, employing 35 professionals and servicing more than 450 clients.

The company provides a wide range of information technology services and targets small- and medium-sized businesses that are primed for growth. Miles designs systems to automate internal business processes and extranet and intranet Web site portals. Miles also installs and supports the networks to accomplish these systems.

Miles believes technology is key to business survival.

"If everybody is able to take advantage of technology and you can't, then you are falling behind," Miles said. "This is not about technology for technology's sake."

In 2003, Miles opened its new 28,000-square-foot corporate headquarters in Moorestown. The spacious headquarters features the latest technology, open work areas and an attractive entrance. More impressive is what Miles Technologies doesn't have.

For one thing, there are no filing cabinets. The entire office is paperless. Every document-invoices, service contracts, pay stubs, etc.-is kept electronically and can only be accessed by computer. Everyone in the office can access a customer's file from their desk, and they can also retrieve everything from marketing plans to driving directions.

There are also few individual offices. About 30 programmers design information systems and write software in a large auditorium-like room that Miles calls "mission control."

Finally, in what seems unusual for a company that boasts the latest technology, phones are not answered by an automated voice-mail system.

"Phones should be answered by a human being," Miles says. "That is something a computer does not do well. It doesn't sense frustration. It doesn't sense urgency."

While generally satisfied with New Jersey as a place to do business, Miles said he was concerned about the impact that ever increasing taxes would have, not only on his business, but on his clients as well.

Bark and Chatzidakis agreed that taxes were too high in New Jersey and pledged to fight against the so-called millionaire's tax proposed by the Governor.

NJBIA's Site Visit Program is designed to provide valuable information to legislators about businesses in their districts. For more information about hosting a Site Visit at your business, contact Frank Robinson at 609-393-7707, ext. 225 or frobinson@njbia.org.

Joanne Jaeger
Manager, Facilities and HSE
Ortho-Clinical Diagnostics, a Johnson & Johnson Company

Joanne Jaeger is the perfect example of a deeply involved NJBIA member who reaps the benefits of that involvement.

Every year, Jaeger attends at least one of NJBIA's Legislative Briefing Breakfasts. You can find her at most fund-raisers held by NEW JOBS, NJBIA's political action affiliate. And she has been a part of NJBIA's Women Business Leaders Network since its creation more than two years ago. This is in addition to her work as manager of facilities and Health, Safety, and Environmental for Ortho-Clinical Diagnostics in Raritan. But it is with the Employer Legislative Committees (ELCs) that Jaeger has really left her mark.

The ELCs are NJBIA's grassroots affiliate. There are 18 ELCs in New Jersey representing all 21 counties. Each one is run locally. ELC members meet regularly with local legislative leaders and policy makers over breakfast or lunch. Jaeger began attending her local Somerset County ELC in the mid-1990s.

"As someone new to the world of government affairs, I was excited by the access to elected officials and the networking opportunities that ELC meetings presented," Jaeger explains. "The ELCs present a great opportunity to get to know the people who are crafting the laws that impact our businesses, our communities and our lives."

Jaeger became chair of the Somerset ELC in 1998, turning it into a large, dynamic group and one of the most effective ELCs in the State. From 2001 to 2003, she served as statewide chair of the ELC program.

"Joanne is someone you can count on to show real leadership," NJBIA Senior Vice President Melanie Willoughby said. "Whether at an ELC, a NEW JOBS fund-raiser, or any other NJBIA event, Joanne is there to help push our probusiness agenda and build a strong, active grassroots network."

What's more, Jaeger manages to do all this while also being responsible for all worldwide environmental and business continuity programs for Ortho-Clinical Diagnostics. She is also responsible for safety programs and facility operations at the Raritan facility.

Businesses can get some extra help and at the same time, provide valuable experience to high school students.

The 12th Grade Option is an initiative of Governor James E. McGreevey that is designed to pair career-minded high school seniors with businesses that can teach them the skills they will need in the future. Employers will get a good employee and build a lasting relationship that could lead to an entry-level job later on.

Interns will be matched with compatible businesses in industries in which they have an interest. Business and high school officials will work together to tailor internships to meet both the employer's and student's needs.

NJBIA member companies who are interested should start planning now by ordering a Career Internship Resource Packet from NJBIA. To get a copy, contact NJBIA Libby Vinson, vice president for education, at 609-393-7707, ext. 201, or lvinson@njbia.org.

"We have heard far too often from employers that students do not get all the skills needed to make effective transitions from school to career-oriented work or to continued education and training," NJBIA President Philip Kirschner said. "The 12th Grade Option addresses this issue by giving our high school students on-the-job experience and a clearer understanding of how classroom concepts are applied in the workplace."

TUESDAY, JUNE 8
New Good Neighbor Awards Luncheon
NJBIA's 44th 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 worked to bring about an improved business climate in New Jersey by building or renovating a commercial facility. A reception will be held at 11:45 a.m., followed by lunch from 12:30 p.m. to 2:00 p.m. Tickets may be purchased for $65 each, with tables of 10 available. For more information, contact Stacy Wichner at 609-393-7707, ext. 213. For sponsorship opportunities, contact Sherry Esteves at ext. 219.