Making New Jersey the only state in the nation to classify carbon dioxide (CO₂) as a pollutant would lead to higher energy costs and expand the State's already bloated environmental bureaucracy, NJBIA told the NJ Department of Environmental Protection (DEP) last month.

Testifying at a public hearing on the issue, NJBIA First Vice President Jim Sinclair said the rule would exceed federal standards while having little impact on the emissions of so-called "greenhouse" gases that many scientists believe cause global warming.

The proposed rule is the first step in regulating CO₂ as a pollutant, including it with five other greenhouse gases that are already regulated.

Unilaterally requiring reductions in CO₂ emissions by fossil fuel plants in New Jersey would lead to higher energy costs for consumers, Sinclair told the DEP. Furthermore, once the classification is in place, it could open the door for regulating CO₂ from smaller emission sources like cars, trucks, manufacturing equipment or anything that runs on combustible fuels.

While New Jerseyans would pay for the additional costs, the regulations would provide little environmental benefit. Unilateral efforts at CO₂ emissions reductions, even if successful throughout the Northeast, would have little impact on the overall CO₂ content of the atmosphere. New Jersey alone produces too little CO₂ to have a significant impact on overall greenhouse gas emissions.

Days before leaving office, Governor James E. McGreevey signed an executive order delaying implementation by at least seven months of a "smart growth" law designed to facilitate development in urban and older suburban areas. The order requires the NJ Departments of Environmental Protection, Community Affairs, and Transportation to give the public 90 days to comment on how the law should be implemented and another 120 days to propose implementation rules.

The law would have expedited consideration of permits for businesses moving to or expanding to areas of New Jersey already designated for growth by the State Plan. Agencies would have had 90 days to either approve or reject permits for projects in the designated growth areas.

NJBIA strongly supports the law because it provides a powerful incentive to promote growth in certain areas of the State instead of just restricting growth throughout New Jersey . For more information, contact Jim Sinclair at ext. 236.

Additional job training and more affordable health insurance will do more to help the working poor than imposing a higher minimum wage, which would make it harder for employers to keep entry-level workers, NJBIA told the State Senate Labor Committee on November 8. The committee held a hearing on the "conditions of the working poor" and invited NJBIA as well as representatives from other groups to testify.

Although no specific bills were considered at the hearing, several witnesses called for increasing the minimum wage beyond the federal $5.15 minimum to $7 or $8 per hour.

Testifying before the committee, NJBIA Vice President John Rogers warned that "some take an overly simplistic approach to the plight of the working poor and believe that merely increasing the minimum wage is the answer. But the wages that are paid to employees are based on their qualifications, education, experience and demand for their skills." If wages are pushed beyond what an employers' revenues can support, fewer jobs would be available for the very workers legislators are trying to help.

Rogers also told the committee that businesses cannot simply increase prices to cover higher wages. New Jersey companies face competitors in other states without a higher minimum wage and also must worry about international pressure from foreign competitors.

Instead of forcing employers to pay workers up to 60 percent more in entry-level wages, Rogers said, the State should improve employees' skills so they can earn more. "Skills training is the key to economic success, not only for companies but also for individual workers," Rogers said. "While New Jersey spends $12 billion each year on K-12 education and $2 billion on higher education, only $400 million is available to train adult workers. If New Jersey is really serious about assisting the working poor, it will allocate additional resources to training programs."

Property Tax Panel Debates Delegate Selection, But Convention Unresolved

The New Jersey Property Tax Task Force last month discussed ways to reduce special-interest influence in selecting delegates to a constitutional convention, but did not address the issue of whether or not to actually hold a convention to reform the State's property tax system.

The task force members expressed concern that special interest groups would support the election of delegates who support their own positions and thus undermine the ideal of the convening of a representative citizen body to reform New Jersey 's property tax system

Portions of Contractor Registration Act Delayed until December 2005

Governor James E. McGreevey on November 8 signed legislation delaying implementation of certain parts of the Contractor Registration Act until December 31, 2005.

Specifically, provisions requiring annual registration of home improvement contractors with the Division of Consumer Affairs, mandates concerning information to be contained in certain home improvement contracts, and provisions regarding cancellation of these contracts will not take effect until December 31, 2005. For more information, contact John Rogers at ext. 209.

2005 Business Outlook Survey:
Business Confidence Reaches Highest Levels in Four Years
Powered by Solid Outlook for Sales, Profits & Employment

New Jersey companies expect 2005 to be the best year for sales, profits, business spending and employment since 2000, according to NJBIA's 2005 Business Outlook Survey, released November 23 at a press conference in Trenton .

Fifty-six percent of companies responding to the NJBIA survey expect their sales to rise next year, 49 percent expect profits to rise, and 46 percent expect to increase spending. Employment expectations are also on the rise, with 27 percent expecting to hire more workers. These are the highest levels of confidence since the 2000 survey.

Rising sales and profits over the past year apparently did much to strengthen the confidence of the business community. In 2004, business activity actually matched expectations, a welcome change after three lean years in which overall business activity consistently fell short of expectations.

"A stronger economy in 2004 did a lot to restore the confidence of New Jersey employers," said NJBIA President Philip Kirschner. "If the economy performs as expected, 2005 should be an even better year. After sputtering and misfiring for three years, the economy is picking up steam, and the outlook is encouraging."

The 2005 Business Outlook Survey was distributed to NJBIA's 22,500 NJBIA member companies in September 2004. The survey findings are based on the first 1,900 responses. Respondents came from every industry and every region of the State. Nearly three out of four respondents were small companies with 1-24 employees.

Especially noteworthy are employers' hiring plans. Twenty-seven percent expect to hire more workers in 2005, but only 7% anticipate layoffs. The remaining 66% of companies believe employment will remain stable. Employment expectations are positive across the board for companies in every major industry, including manufacturing.

Although they are more positive in their economic outlook, New Jersey employers remain unhappy with the State's business climate and with New Jersey as a place for business expansion. Following are more survey findings:

General Economic Outlook

In their outlook for the national economy and for their own industries, respondents expect about the same results as last year. Expectations for the New Jersey economy remained more subdued. In assessing the outlook for their own industries, 41% expect to see gains in the first half of the year, and a virtually identical proportion expect conditions to stay about the same. Only 19% expect conditions to worsen.

Employment

In 2004, hiring activities at individual companies more closely matched expectations than at any time in the last four years. Twenty-four percent of this year's respondents reported adding workers to their payrolls in 2004, while 17% trimmed their payrolls. This was almost an exact reversal of what happened in 2003, when 24% reported cutbacks and only 15% reported increases. In 2005, 27 % expect to hire more workers and only 7% anticipate cutbacks.

Business Spending

Survey respondents anticipate spending more on goods and services. A larger proportion of companies plan to spend more on capital investments, purchases and advertising in 2005 than they did the year before.

Wages and Salaries

Seventy-two percent of employers gave pay increases in 2004, the same proportion as had anticipated doing so in last year's survey. However, the magnitude of pay increases was larger than expected. Forty-six percent of last year's respondents expected to make pay increases of 3% or more. As it turned out, 53% of this year's respondents experienced wage and salary gains of that size or larger. The biggest difference was in the proportion of employers paying increases of 6% or more. Only 3% of last year's respondents projected pay hikes of that magnitude, but 8% actually paid that increase in 2004.

Looking ahead to 2005, 76% anticipate the need to increase wages and salaries. Twenty-three percent expect no change and only 1% anticipate a decline.

Worst Problems

When asked to rank their problems, survey respondents identified the cost of health insurance as their worst problem for a 16th consecutive year. The second worst problem identified in the 2005 survey was property taxes, followed by the overall cost of doing business in New Jersey .

New Jersey 's Business Climate

In spite of an improving economy, survey respondents continue to give New Jersey low marks as a place for business expansion. New Jersey 's favorable ratings have fallen or stagnated for four consecutive years. Only 28 percent said New Jersey is a good place for business expansion, the same as the year before.

New Jersey vs. Other States

When asked to compare New Jersey to other states in key areas of government performance, significant majorities said New Jersey is worse than other states in the following areas:

• Healthcare costs. An overwhelming 93% feel New Jersey is worse at controlling healthcare costs, a slight improvement from 95% in the 2004 survey. This compares with 84% four years ago. Except for the 2003 and 2004 surveys, this was the worst rating for this indicator since the 1992 survey.
• Government spending. Ninety-one percent believe New Jersey is worse than other states in controlling government spending, up from 64% four years ago and the worst since the 1991 survey.
• Taxes and fees. Ninety-five percent say New Jersey is worse than other states with regard to taxes and fees, little changed from 94% a year ago when the question was first asked.
• Attitude towards business. Seventy-four percent said New Jersey has a worse attitude towards business than other states, unchanged from last year's survey and up from 46% three years before that. The readings for the past two years were the worst since the 1994 survey.

Quote of the Month

"A stronger economy in 2004 did a lot to restore the confidence of New Jersey employers."

NJBIA President Philip Kirschner
on the 2005 Business Outlook Survey results.

MEET THE DECISION MAKERS 2005

Take this opportunity to hear from three key decision-makers in the Administration of new Governor Richard Codey: Peter Cammarano, Chief of Staff; Thomas Carver, Commissioner, NJ Department of Labor and Workforce Development; and Bradley Campbell, Commissioner, NJ Department of Environmental Protection.

Find out what the Codey Administration has planned for New Jersey over the next year. Seating is limited, so sign up today to hear from three of the most influential people in our State capital.

The dates for each breakfast are as follows:

Tuesday, February 1
Peter Cammarano, Chief of Staff, Office of the Governor

Tuesday, March 1
Thomas Carver, Commissioner, NJ Department of Labor and Workforce Development

Tuesday, March 15
Bradley Campbell, Commissioner, NJ Department of Environmental Protection

All three of these breakfasts are being held at the Sheraton Edison Hotel from 7:45 a.m. to 10:00 a.m. The cost for each is $59 per person for NJBIA members and $99 for nonmembers. For more information, contact Katie Wittkamp at 609-393-7707, ext. 239.