The event, sponsored by Bank of America, featured welcoming remarks by Ann Limberg, president of Bank of America New Jersey; Michael Karlovich of ConocoPhillips Bayway Refinery and the State ELC Chair; Douglas Troast, CEO of Troast Construction Company and chairman of NEW JOBS PAC, the business community’s political action committee; and NJBIA President Philip Kirschner. The Employer Legislative Committees are the grassroots affiliate of NJBIA.

But the main attraction was the Corzine-Forrester match-up. Forrester, who spoke first, said he wanted to change the antibusiness policies that were forcing employers to leave the State. He pointed to a survey indicating that three quarters of the businesses in New Jersey believe State government is hostile to employers. He noted that New Jersey ranked 41st in the nation in the rate of new private sector job growth. While private sector job growth was half the national average, he said government employment in New Jersey grew at four times the national average. “Businesses are leaving,” Forrester said. “They are turning out the lights because they are being crushed by over-regulation and over-taxation. I want to change that.”

Corzine said that as Governor, he would empower entrepreneurs, create good-paying jobs and lay the groundwork for a bright economic future. He pointed to business friendly legislation he has fought for in Washington, including repeal of the Alternative Minimum Tax, incentives for repatriating offshore capital, terrorism insurance, and expanding transportation dollars for the State. “Our State’s most serious financial challenges—whether rebuilding our schools, improving our transportation network, or providing tax relief—will only be met if we sustain a strong and expanding State economy,” Corzine said.

On healthcare, Corzine said rising costs are “undermining the well-being and strength of our businesses, as many of you have told me, draining the fiscal capacity of governments, and creating a desperate anxiety among our fellow citizens.” Reducing the number of the uninsured is key to controlling costs. He said his plan would make insurance accessible to 700,000 New Jerseyans who do not have coverage now.

He added that his small business health insurance proposal was based in part on NJBIA’s health insurance reform plan, particularly for reforming mandates.

Forrester called for tort reform, health savings accounts and new alternative mechanisms to help businesses provide healthcare for their employees. He pledged to end what he called lawsuit abuse, saying healthcare costs will never be brought down to a reasonable level without it. “We cannot provide access to healthcare professionals any longer in New Jersey unless we have tort reform…” he said. “We have created an atmosphere in which we have businesses that cannot conduct themselves in even the most basic way. We need tort reform.”

On the budget, both candidates pledged to cut spending and increase property tax relief without raising taxes. Forrester said he would employ zero-based budgeting and standardized procurement policies. He said he would enact a 30 percent tax credit to help reduce the cost of property taxes and noted that he has taken a no-new-taxes pledge. “It is time that we take our rightful place between our two great neighbors of New York and Pennsylvania,” Forrester said. “But we cannot do that until we bring State spending under control and put the good business practices in place.”

Corzine said that economic growth is the key to balancing the State budget and called for replacing the current policy of “tax, borrow and spend” with “invest, grow and prosper.”

“After 30 years of business experience, I think I’ve learned that working on growing the pie is a heck of a lot more fun than fighting about how you divide it,” Corzine said. “The former is a productive dynamic exercise. The latter is static and often destructive.”

He called for outcome-based budgeting, where programs are retained based on their effectiveness, and for capital budgeting and multi-year financial plans. He also pledged to reduce political employees and public relations budgets, institute bulk purchasing practices in State procurement, and upgrade technology. His property tax plan would increase tax rebates by 10 percent a year for four years.

During her remarks, Bank of America New Jersey President Ann Limberg expressed her company’s desire to get involved by fostering dialogue between business and government.

“We want to do our part to strengthen the State’s business climate. We want to encourage State policies that will create jobs and a thriving economy,” she said. “As business leaders and state officials, we all have a stake in the future success of our incredible State and it’s important that we work together. What better way to do this than to support this dinner, at which the gubernatorial candidates [made] their first major address to the business community.”

In his opening remarks, NJBIA President Philip Kirschner stressed the importance of the race and the impact it will have on creating a strong business environment capable of sustaining New Jersey’s economic growth.

“Just as this election is important to the state as a whole, it is important to the tens of thousands of employers who contribute so much to New Jersey’s economic prosperity and quality of life,” he said.

Candidates at a glance

US Senator Jon Corzine began his financial career with a Chicago bank and later earned his MBA from the University of Chicago. In 1975, Senator Corzine moved with his family to New Jersey after being recruited by the Wall Street investment firm, Goldman Sachs. Over the next 25 years, he worked his way to the top, eventually becoming chief executive officer. More recently, Senator Corzine has devoted himself to making a difference in government, winning election to the US Senate in 2000.

Doug Forrester is a successful businessman who moved to New Jersey about 30 years ago. In the 1980s, during the administration of Governor Tom Kean, he served as Assistant Treasurer and as Director of the NJ Division of Pensions and Benefits. Fifteen years ago, Forrester founded Benecard Services, Inc. It has flourished into a significant business that helps employers find affordable prescription drug insurance coverage for their employees. Today, Benecard is one of New Jersey's most successful small businesses.

The Assembly voted unanimously to form a specialized business court to rule on disputes between employers. A-3544 (Diegnan, Barnes) would create the Commercial and Technology Part in the Law Division of the Superior Court. The court would be comprised of judges who would rule on commercial disputes between businesses. By forming a specialized business court, the NJBIA supported bill would ensure that litigants receive expert attention and a prompt resolution with minimum disruption to their operations. For more information, contact Christine Stearns at ext. 260.

Manufacturers will be able to keep an estimated $30 million in tax savings under the new State budget.

To increase revenue, lawmakers were considering a bill that would deny manufacturers the ability to take a federal tax deduction on their State tax returns. A new federal law allows manufacturers nationwide to deduct 3 percent of their net manufacturing income from the sale of goods manufactured within the US. Current State law allows New Jersey manufacturers to take the same deduction on their State tax returns.

S-2638 (Bryant) would have eliminated the deduction at the State level by what is known as “decoupling” from the federal law, while A-4294 (Cryan) would have preserved the tax deduction but “decoupled” from other parts of the federal program. On June 30, at NJBIA’s urging, the Senate amended S-2638 to preserve the deduction for most State manufacturers. For more information, contact Art Maurice at ext. 247.

The Legislature on June 30 gave final approval to a bill allowing unions to be established in workplaces without holding elections, but not before amending the measure to exempt all nonprofit employers. The bill has gone to the Governor for his consideration. The overwhelming majority of State employers are covered by the National Labor Relations Act (NRLA), which requires employees to vote in a confidential ballot election in order to form a union. New Jersey unions were hoping to get A-1820 (Egan, Van Drew) passed so they would not have to hold elections to organize businesses not covered by the NRLA.

Under the bill, a workplace would be unionized if a majority of employees sign cards indicating they preferred to join a union. With the amendments, nonprofit hospitals and groups could not be organized without an election. Small businesses not involved in interstate commerce would still be impacted, but because most businesses are involved in interstate commerce in some fashion, few workplaces would be affected. Realtors and independent contractors would also be subject to instant unionization. NJBIA opposes instant unionization because no workplace should be unionized unless employers are allowed to present their views and employees are allowed to vote, free of intimidation. For more information, contact John Rogers at ext. 209.

Lawmakers gave final approval June 30 to legislation creating a Business Ombudsman within the New Jersey Board of Public Utilities. S-2247 (Sarlo, Lesniak)/A-3471 (Cryan, Caraballo), is part of NJBIA’s Agenda for Manufacturing Renewal in New Jersey, and now is on Governor Richard Codey’s desk. An ombudsman within the BPU could help companies shop for electricity and gas and act as an information resource for businesses seeking to lower their energy costs through State energy programs, subsidies and grants.

Employers, manufacturers in particular, are among the largest electricity and gas consumers in the State. Yet many employers find it difficult to navigate the State’s complex energy market. While the deregulated market has opened electric and gas consumption to competition, 40 percent of large users remain with their traditional utilities and have not yet shopped with a third-party supplier. Not only are they missing out on potential savings, they are also paying a surcharge to the BPU for failing to shop around. For more information, contact Sara Bluhm at ext. 204.

The Senate Budget and Appropriations Committee voted June 29 to reduce the scope of legislation aimed at eliminating the 6 percent sales tax on gas and electricity used by manufacturers in Urban Enterprise Zones (UEZ). On June 27, the Assembly passed A-3484 (Greenwald, Fisher)/S-2358 (Asselta, Sweeney) to exempt all manufacturers in UEZs. The Senate Committee on June 29 amended the bill to limit the tax exemption to manufacturers with 250 or more employees in order to save money.

While this bill is a good first step in reducing energy costs in the manufacturing sector, NJBIA believes that sales taxes on energy should be eliminated for all manufacturers. Lowering energy costs would free up capital that manufacturers could use to preserve jobs, modernize operations and become more competitive in the future. For more information, contact Sara Bluhm at ext. 204.

The Assembly on June 23 passed three NJBIA-backed health insurance reform bills that would help alleviate one of the biggest problems for employers and employees alike—the exploding cost of health insurance. The bills would make it easier for small businesses and individuals to obtain health insurance, reform the small group and individual insurance markets, and allow State employers and their employees to utilize federal Health Savings Accounts (HSAs).

The impact of rising health insurance is by far the biggest problem facing NJBIA member companies. Employers participating in NJBIA’s 2005 Health Benefits Survey reported paying an average of $7,300 per employee for insurance and had experienced a 55 percent cost increase over four years. The survey also indicated that double-digit rate increases were forcing a drop in the percentage of employers offering health insurance for the first time in the survey’s 12-year history. With 5 million New Jersey residents receiving their insurance from private sector employers, this hyperinflation could have devastating effects on the healthcare system.

The three bills passed June 23 incorporate key provisions of NJBIA’s Health Insurance Reform Plan. The three bills are:

• A-3359 (Cohen, Weinberg), The Health Insurance Affordability and Accessibility Act: This bill would provide more flexibility in the design of health plans for individuals and employers with two to 50 employees by making several changes to the State-regulated Small Employer (SEH) and Individual (IHC) Health Insurance markets. Specifically, it would institute a modified community rating for IHC plans allowing insurance companies to vary rates by up to 200 percent based on age, gender and geography. This would allow insurers to offer lower priced plans to younger, relatively healthy people, thus attracting more insured individuals to the system. The bill also would increase choice and competition among consumers by requiring insurers to offer health plans in both the individual and small employer markets, not just one or the other.

• A-3440 (Cohen, Russo), Health Savings Accounts: Health Savings Accounts (HSAs) were created as part of recent federal legislation. They allow employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses. Federal regulations require those using HSAs to be covered by a high-deductible insurance plan that covers expensive medical treatments, but New Jersey’s high-deductible health plan does not meet federal requirements. A-3440 would change State law to permit the sale of qualified high-deductible insurance plans.

• A-3379 (Cohen, Voss), Minimum Participation Rates: This bill has passed both houses and is on the Governor’s desk. It would make it easier for small businesses to obtain health insurance for their employees by allowing them to count employees who are covered by Medicaid and NJ FamilyCare towards their minimum employee participation rates. The small-group insurance market provides health benefits to small businesses with two to 50 employees. Insurers require these businesses to guarantee that a minimum number (usually 75 percent) of their employees will participate in the insurance plan. Counting employees covered under State Medicaid insurance or the State-run NJ FamilyCare program would make it easier for more small businesses to qualify for this program.

A-3359 and A-3440 head to the Senate for consideration. For more information, contact Christine Stearns at ext. 260.

Governor Richard Codey on July 7 signed NJBIA-backed legislation that repeals a year-old tax on air emissions that turned out to be much broader than expected, costing employers $12 million last year. Codey signed A-3667 (Sires, Van Drew)/S-2124 (Adler, Doria), which had the backing of the NJ Departments of Treasury, Commerce and Environmental Protection. The surcharge was imposed in June 2004 as part of last year’s budget. The intent was to assess a new retroactive tax on facilities that generated certain air emissions, but the surcharge has actually penalized facilities that have reduced emissions.

NJBIA-backed legislation that would expand New Jersey’s Regulatory Flexibility Act to help small businesses was approved June 30 by the Assembly. The bill, A-3973 (Chivukula, Roberts), would expand the definition of a small business and add new provisions to ease the regulatory burden.

Currently, the New Jersey Regulatory Flexibility Act allows simplified reporting requirements for small businesses, defined as those with fewer than 100 employees, and requires an analysis of any proposed rule’s impact on small businesses. Under A-3973, businesses with less than $6 million in sales, regardless of the number of workers it employs, also would be considered small businesses. The bill would also require agencies to include consolidation or simplification of a compliance or reporting requirement for small businesses when adopting or revising regulations. Additionally, the bill would grant small businesses adversely impacted by a regulation the right to seek judicial review. Small businesses could petition the Appellate Division of the Superior Court within one year of final adoption of the rule, and the court would be able to order the agency to rewrite the rule or defer enforcement of the rule on small businesses.

The bill now heads to the Senate for consideration. For more information, contact Christine Stearns at ext. 260.

Legislators gave final approval to a compromise diesel engine retrofit bill that would not impact most private-sector vehicles or engines. The amended version of the bill, S-1759 (B. Smith)/A-3182 (McKeon, Manzo), would limit diesel engine retrofits to school buses, publicly owned diesel garbage trucks, privately owned diesel garbage trucks under public contract, publicly owned on-road diesel vehicles and off-road diesel equipment, and all commercial buses. Originally, the bill would have impacted private sector companies, requiring them to retrofit their trucks and other equipment at a cost of up to $8,000 per engine. NJBIA supports the compromise bill because it would help cut diesel engine emissions without putting New Jersey companies at a competitive disadvantage.

As a member-driven organization, NJBIA maintains many standing policy committees where members analyze legislation and regulations and tell us how State policies will impact their businesses. Committee Roundup is a regular report on their activities. To learn more about NJBIA’s policy committees, contact Sandy Lavery at 609-393-7707, ext. 221, or sandylavery@njbia.org.

Human Resources Committee Meeting

J. Frank Vespa-Papaleo, Esq., director of the NJ Division of Civil Rights, recently gave members of the NJBIA Human Resources Committee an overview of how to comply with the State laws against discrimination.

The Division is responsible for the enforcement of the New Jersey Law Against Discrimination and the New Jersey Family Leave Act. These statutes represent some of the most challenging and complex areas of the law for employers and human resource professionals.

“Director Vespa-Papaleo provided the Committee with an excellent presentation,” said Committee Chair JoAnn Trezza.

The Human Resources Committee also discussed pending legislation that would authorize unemployment benefits for employees that are “locked out” of work during a job action and changes to the Law Against Discrimination that would prohibit the use of employer arbitration agreements.

Health Affairs Committee Meeting

State Senator Ellen Karcher, representing parts of Monmouth and Mercer Counties, talked about her role on the Senate Health Committee. Karcher said she understands the difficulty that businesses are having affording health insurance and indicated she does not support legislation mandating additional health coverage in the current political environment. She said that she had sponsored a measure to mandate the coverage of mammography for women over the age of 35, but felt it was a special circumstance which ensured women had access to life saving preventive testing, which is thoroughly supported by the data.

The Senator also discussed NJBIA-backed efforts to reform New Jersey’s FamilyCare programs and electronic health and medical records, among other topics.

A periodic profile of the people who make NJBIA the State’s premier business association.

Robert J. Magno
Tax Manager, State and Local Taxes
Wyeth

With a tax system as complicated as New Jersey’s, an experienced leader capable of steering a business through the seemingly endless maze of numbers, regulations and paperwork is invaluable.

Robert J. Magno is just such a leader whose years of experience in corporate taxation make him a key member of the NJBIA Taxation Committee, which analyzes tax-related legislation and advises NJBIA’s Government Affairs staff on its impact. Magno has served on the committee for 20 years, the last 10 as its chairman. He is also a member of the Tax Executives Institute (TEI) and has been on the Board of Directors for the New Jersey Chapter of TEI.

“As a member of the Taxation Committee, I especially enjoy the opportunity to network with tax professionals from other companies and industries,” Magno said. “Membership on the Taxation Committee also provides me with the opportunity to keep current with pending tax legislation and measure the tax impact on my company.”

After gravitating away from engineering in college, Magno remained faithful to his love of math and applied concepts and received a B.S. in Accounting from the University of Dayton in 1965.

Upon graduation, he entered the US Army and served two years on active duty as an officer. Magno’s unit, attached to the 25th Infantry Division, served in Vietnam and California providing medical assistance to soldiers in need.

Over the span of his 35-year career, Magno has specialized in State and local taxation and worked primarily for two multinational pharmaceutical companies (Wyeth and the former American Cyanamid Company). He said the biggest change in the accounting industry over this time occurred recently with the Enron scandal, which gave rise to regulations that all companies must adhere to, creating an atmosphere of much tighter financial control.

“Bob is one of those very unique tax experts who can translate the most arcane tax legalese into understandable English,” said NJBIA Taxation First Vice President Arthur Maurice. “His knowledge of the tax code is unsurpassed. NJBIA has come to rely on his knowledge and advice.”

NEW JOBS
Legislative Receptions
NEW JOBS will hold five evening legislative receptions to support the State’s probusiness legislators in the 2005 elections. Proceeds will benefit the New Jersey Organization for a Better State (NEW JOBS), the business community’s leading political action committee. Support legislators who will work for a better business climate. For more information, call Sherry Esteves, ext. 219, or visit www.newjobspac.com.

July 7
Morris County Legislative Reception, Wyeth, Madison

September 13
Monmouth/Ocean County Legislative Reception, The Mill at Spring Lake Heights

September 22
Atlantic County Legislative Reception, The Carnegie Library Center in Atlantic City

September 27
Mercer County Legislative Reception, The Boathouse at Mercer County Park

October 6
Night at the Meadowlands, Meadowlands Racetrack

Governor Codey has shown a real understanding of the fact that business now pays much more than its fair share.”

NJBIA First Vice President Arthur J. Maurice