Three bills touted as recycling enhancers would increase the cost of doing business in the State and put some companies at a competitive disadvantage, NJBIA told the Senate Environment Committee on August 18. NJBIA gave testimony on three bills:
S-2615 (B. Smith), which would impose a $3-per-ton tax on employers for solid waste disposal; S-2578 (B. Smith), which would require certain products sold in the State to be packaged with high percentages of recycled material; and S-1861 (B. Smith), which would make manufacturers of electronic products financially liable for their ultimate disposal.

“The business community is committed to working on recycling efforts, but we cannot support initiatives that place New Jersey businesses at a disadvantage or impose unnecessary taxes and mandates,” NJBIA Vice President David Brogan told the committee. “By working together, we can develop recycling programs that not only make sense environmentally, but also economically.”

The tax on solid waste disposal would generate approximately $34 million from employers and consumers, which would be distributed to State and local governments to support recycling programs. However, the bill gives little guidance on distributing the grants and makes no mention of any quality-control measures.

S-2578 would require rigid plastic packaging containers in New Jersey to be composed of 25 percent recycled material by January 2006 and 35 percent by 2016. Every plastic beverage container would be required to have at least 10 percent recycled content by 2006 and 15 percent by 2011. Every rigid plastic container bearing a personal care product would have to be composed of at least 10 percent recycled content by 2006 and 15 percent by 2011. This would force manufacturers to make products just for New Jersey or simply stop selling in the State. In its testimony, NJBIA noted that these containers make up only 1 to 2 percent of the total waste stream.

Under S-1861, manufacturers, sellers, importers and exporters of popular home-entertainment equipment would have to submit an electronic-waste management plan to the DEP within a year of the bill’s passage or be prohibited from selling the equipment in this State.

NJBIA opposes this bill. Not only would it create a bureaucratic nightmare and a patchwork of recycling programs throughout the State, but companies would be penalized on the behavior of their consumers. For more information, contact David Brogan at ext. 236.

The NJ Election Law Enforcement Commission (ELEC) has proposed new rules for lobbying that would require employers to report contacts with government officials as well as legislators, but not for most routine business. The rules were published August 1. A public hearing on the regulations is scheduled for September 20, and the Commission will accept written comments until September 30. ELEC hopes to have the new rules in place by January.

This is the second attempt by ELEC to implement a new law that expands the definition of lobbying. Regulations proposed at the beginning of the year were so broad they would have forced thousands of employers and their employees to register as lobbyists and pay steep fees if they contacted government officials about environmental permits, bids on public contracts and other routine business. NJBIA testified and submitted written comments urging ELEC to exclude routine activities.

The new regulations exclude communications of a “routine, ministerial nature” and list 14 specific activities that would not be considered lobbying. These include scheduling a meeting, requesting forms, applying for a permit or license, and requesting information needed to comply with existing laws.

For more information, contact John Rogers at ext. 209.

Governor Richard Codey on August 29 signed into law S-2247 (Sarlo, Lesniak)/A-3471 (Cryan, Caraballo, Watson Coleman), which creates a business ombudsman within the NJ Board of Public Utilities. The new law was an important goal of NJBIA’s Agenda for Manufacturing Renewal in New Jersey. Manufacturers are among the largest energy consumers in the State and pay some of the highest rates in the nation. According to the US Department of Energy, New Jersey’s industrial users paid 44 percent more than the national average for electricity in 2003. The ombudsman within the BPU will help companies shop for electricity and gas and act as a centralized information resource for money-saving energy programs, subsidies and grants.

While employers in general, and manufacturers in particular, are among the largest electricity and gas consumers in the State, many find it difficult to navigate New Jersey’s complex energy market. The deregulated electric market has opened electric and gas consumption to competition, but 40 percent of large users remain with their traditional utility and have not yet shopped with a third party supplier. Not only are they missing out on potential savings, but they are also paying a surcharge to the BPU for failing to shop around.

Additionally, funds collected through utility bills are set aside for consumers, including employers, to be used for conservation, energy efficiency upgrades, alternative energy sources such as solar power, and other programs designed to lower energy costs through reduced consumption. The ombudsman will help employers navigate the multitude of grants, tax incentives and low interest loans available. For more information, contact Sara Bluhm at ext. 204.

Two new staff members joined the NJBIA Government Affairs Department in July. David Brogan is Vice President of Environmental Policy and Christopher Emigholz is Director of Education Affairs and Deputy Director of the New Jersey Policy Research Organization (NJPRO) Foundation, NJBIA’s research affiliate. Brogan takes over environmental issues and the Environmental Network from First Vice President Jim Sinclair, who recently retired.

Before joining NJBIA, Brogan was a lobbyist for Capital Public Affairs Inc., representing corporate clients and State associations. Prior to that, Brogan served as the chief environmental advisor to the NJ Senate Republicans and staffed a variety of committees including the Senate Environment Committee.

Emigholz comes to NJBIA from the State Senate Republican Office, where he was responsible for handling education issues. He served as staff aide to both the Senate Education Committee and the Senate Community and Urban Affairs Committee. Emigholz also served as a teacher in Atlanta, as part of the Teach for America Program. Brogan can be reached at ext. 236. Emigholz can be reached at ext. 201.

More Than 300 Come Out For NJBIA’s 35th Annual Golf and Tennis Day
Two hundred and fifty golfers and 16 tennis players competed for trophies and prizes in NJBIA’s 35th Annual Golf and Tennis Day on July 19 at Forsgate Country Club in Monroe Township and the East Brunswick Racquet Club and dozens more attended the evening reception and dinner.

“Today we got away from work, got away from politics and got away from the office for a while to play a little golf and tennis, and just have a good time,” NJBIA President Philip Kirschner said at the Golf and Tennis Day dinner.

On Forsgate’s links, Chris Lilley of Roma Bank shot a 70 on the Palmer Course to win that low gross prize, while Bob Klee of Clayton Block had low gross on the Banks Course with a 72. Warren Victor of Action Business Consultants shot a net 71 using the Calloway scoring system to grab the low net prize on the Palmer Course; while on the Banks Course, Tony Lake of Exclusive Auto Collision Center took home the low net prize with a 73.

The women’s low net went to Dana Blonski of Winning Strategies. She shot a net 74 on the Palmer Course. In the tennis tournament, the team of Joe Ford of Millville Iron Works and Peter Blechinger of Alpine Aromatics took first place. Jack Hall of McManimom and Scotland and Sara Maurer of The Olde Mill Inn were runners-up.

More than 80 companies participated as sponsors.

NEW JOBS, the business PAC, will hold two evening legislative receptions to support the State’s pro-business 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. Visit www.newjobspac.com or call Sherry Esteves, ext. 219, for more information.

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

October 6: Night at the Meadowlands, Meadowlands Racetrack

— Become an Awards for Excellence Sponsor! —
Associate your business with excellence by formally recognizing the achievements of your colleagues through one of the following sponsorship opportunities. To become a sponsor, call Sherry Esteves, ext. 219.

Gold Sponsor - $2,000
Includes: reserved table of 10; company name listed on event signs; two-line message in event program; listing in follow-up story in NJBIA’s monthly Business Voice newsletter and New Jersey Business Magazine, both of which reach more than 23,000 business owners and managers across the state; and a link to your company Web site on www.njbia.org.

Silver Sponsor - $600
Includes: one ticket to dinner with reserved seating; company name listed on event signs; two-line message in event program; listing in follow-up story in NJBIA’s monthly Business Voice newsletter and New Jersey Business Magazine.

Bronze Sponsor - $400
Includes: two-line congratulatory message in event program.
NOTE: Copy deadline for congratulatory messages in the event program is October 3.

A little more than a year after kicking off its Manufacturing Counts! Campaign for Manufacturing Renewal in New Jersey, NJBIA can point to meaningful accomplishments and new laws that will help lower manufacturers’ cost of doing business. More importantly, the Governor and State legislators have recognized the important role manufacturing plays in our economy and are focusing on what the State can do to keep good manufacturing jobs in New Jersey.

“First we had to change the perception that manufacturing was a lost cause in New Jersey,” NJBIA President Philip Kirschner said. “Then we had to explain why manufacturing is worth saving. We also had to convince our manufacturers that it is worth their while to participate in the legislative process. We have largely accomplished these goals and as a result, lawmakers have responded by making manufacturing retention and growth an important public policy priority.”

“This is only the start,” Kirschner said. “Now that we have people committed to the cause of promoting manufacturing, we have the much harder job of creating a more pro-manufacturing environment.”

NJBIA kicked off the campaign in June 2004 with a Manufacturing Summit in Newark attended by more than 200 manufacturers. That’s where Kirschner first made the case that manufacturing needed more attention from the State. He pointed out that more than 12,000 manufacturers remained in New Jersey, directly employing 345,000 people and indirectly supporting another 180,000 jobs through their suppliers and service providers.

NJBIA also unveiled Why Manufacturing Counts, an issue paper by NJBIA’s research affiliate, the New Jersey Policy Research Organization (NJPRO), which detailed the many benefits manufacturing provides to New Jersey.
Finally, NJBIA unveiled its Agenda for Manufacturing Renewal in New Jersey, which outlined a detailed legislative agenda designed to help make New Jersey a competitive state for manufacturing again.

Since then, business and political leaders from all over the State have responded.

Seventy-three State legislators from both parties formed a Manufacturing Caucus to share information about manufacturing issues and review the impact of proposed legislation on manufacturers.

Almost 300 manufacturers have joined NJBIA’s Manufacturing Council, which sets policy goals and develops the legislative proposals that form the Manufacturing Counts! agenda. Led by Clifford Lindholm III, president and CEO of the Falstrom Company in Passaic, the Council meets quarterly to discuss legislative activity and other issues.

“The Council is filled with energetic, dynamic people who have great ideas for making New Jersey a more manufacturing-friendly State,” Lindholm said.

Also, for the first time in 20 years, two legislative committees—the Senate Legislative Oversight Committee and the Assembly Commerce and Economic Development Committee—held separate hearings devoted solely to the issue of strengthening manufacturing. Both hearings featured direct testimony from manufacturers, including Lindholm; Alexander “Sandy” McWilliams II, president of McWilliams Forge Company, Inc. in Rockaway and an NJBIA Trustee; Scott Ernst, director of human resources with Air Cruisers Company of Belmar; and Robert Staudinger, president and CEO of National Manufacturing Company, Inc. in Chatham.

These were not empty political gestures. Manufacturing’s supporters in the Legislature delivered real accomplishments, including new laws repealing the air toxics tax that had cost manufacturers $12 million, creating an energy ombudsman to help manufacturers reduce their energy costs, and allowing manufacturers to take advantage of a federal tax credit worth $30 million on their State tax returns. Furthermore, New Jersey’s latest State budget did not contain tax increases on manufacturers.

“These measures are a first step,” said NJBIA Senior Vice President Melanie Willoughby. “These new laws will certainly help manufacturers in New Jersey. But we have a lot more work to do.”

NJBIA will continue to push for health insurance reform to control the cost of providing health benefits to employees, a reduction in energy costs, and common sense environmental laws.

These legislative accomplishments, however, are only part of the story. The New Jersey Economic Development Authority (EDA) recently established several new loan programs to assist manufacturers. NJBIA is also partnering with the New Jersey Manufacturing Extension Program (NJMEP) to offer a free seminar on “lean manufacturing” to NJBIA manufacturing members. (See page MC 3.)

Pro-Manufacturing Laws Enacted in 2005
The NJBIA Manufacturing Counts! Campaign for Manufacturing Renewal in New Jersey has accomplished a great deal since its inception just over a year ago. Working with the Legislature and the Governor, the campaign participants have raised awareness of the issues impacting New Jersey manufacturers. Before taking its summer recess, the Legislature and Governor enacted several bills advocated in NJBIA’s Agenda for Manufacturing Renewal. While more work needs to be done, the campaign is off to a great start. Below is a brief summary of accomplishments to date.

Laws Enacted:
• P.L. 2005, c. 127 permits New Jersey manufacturers to take advantage of a federal tax credit on their State tax returns, saving them an estimated $30 million dollars.
• P.L. 2005, c. 141 repeals the 2004 air toxics tax, which will save manufacturers an estimated $12 million annually.
• P.L. 2005, c. 215 creates a Business Ombudsman at the NJ Board of Public Utilities to help manufacturers secure the energy benefits available to them.

Bills Pending:
• A-3484 (Greenwald, Fisher)/S-2358 (Asselta, Sweeney)—Expands the sales tax reduction on energy for large manufacturers in Urban Enterprise Zones to more manufacturers.
• A-3440 (Cohen, Russo)/
S-2435 (T. Kean)/S-2574 (Rice)—Changes New Jersey law to allow for the sale of federally approved insurance plans so New Jersey employers and employees can take advantage of the tax savings in federal Health Savings Accounts.
• A-3834 (Fisher, Van Drew)—Lowers the required minimum number of retained jobs to 50 from 250 to qualify for tax credits through the Business Retention and Relocation Assistance Act. Qualified businesses can get up to $1,500 per job retained.

The NJ Economic Development Authority (EDA) and the NJ Board of Public Utilities (BPU) have established new programs specifically aimed at helping New Jersey manufacturers.

As part of a partnership with PNC Bank called the NJ Business Growth Fund, EDA is now offering low interest loans of $100,000 to $2 million for capital improvements or equipment purchases.

Rates are set at prime minus 2.5 percent or they are fixed at the five-year U.S. Treasury rate (currently 4.17 percent). The EDA will provide up to a 50 percent guarantee of any single loan for qualified projects under the program.

Businesses with up to $20 million in annual sales are eligible and must submit projects that commit to creating one job for every $50,000 borrowed. However, there is a special exemption for manufacturers, which must only commit to maintaining existing jobs.

To learn more about the program, visit the EDA Web site at www.njeda.com/pdfs/NewJerseyBusinessGrowthFund.pdf.

Manufacturers can also benefit from a host of low-cost financing opportunities offered by the EDA, including tax-exempt bond financing, loans and guarantees. Credit-worthy manufacturing companies seeking financing for capital improvements and equipment are eligible for assistance that may provide lower interest rates than a conventional bank loan, longer terms than a traditional commercial loan, flexibility in choosing a variable or fixed interest rate, and increased access to capital.

Along the same lines, the BPU offers grants and loans to businesses undertaking renewable energy and energy efficiency improvements such as more efficient heating, air conditioning and lighting equipment or installation of solar panels. Manufacturers also may apply to the EDA for up to $1 million in low-interest loans and guarantees to finance the balance of the project costs not met by the grants or rebates. Visit www.njeda.com/pdfs/FinancingTool_Manufacturers.pdf to learn more.

At this workshop, experts with the NJ Manufacturing Extension Program (MEP), will introduce your company to the basic concepts of lean manufacturing and demonstrate the tools and methodology necessary to implement “lean” on the shop floor. This workshop, to be held at the MEP facilities in Newark, will include a hands-on simulation of a production facility. Lean manufacturing is a proven system that can help your company improve productivity, decrease defects, reduce inventory and lead times, and improve on-time delivery. MEP, in conjunction with the New Jersey Business & Industry Association, is offering this workshop free of charge, but it is limited to the first 20 NJBIA member companies that register. If you are interested, contact NJBIA’s Julie Burnett at 800-499-4419, ext. 202. To learn more about lean manufacturing, visit www.njmep.org/services/leanmfg.htm.

Twenty-eight months into its current employment expansion, New Jersey’s private-sector economy is limping through one of the weakest periods of job growth in more than 50 years, an analysis of State employment data shows.
Since hitting a cyclical low in March 2003, private-sector employment in New Jersey has grown by only 69,000 new jobs. That works out to an average annual gain of just 29,600 jobs, less than half of the annual growth of nearly 67,000 private sector jobs in the 1990s expansion. This is also well below the state’s long-term historical average of about 40,000 per year.

Underscoring this problem, private-sector employment declined by 3,700 jobs in July, bringing total private job growth so far this year to just 21,200.

Rutgers University economists James Hughes and Joe Seneca noted in their July 2005 Rutgers Regional Report that New Jersey’s 2002-2005 expansion “has demonstrated unprecedented weakness.” And they urged the State to put a renewed focus on policies that would encourage private-sector job growth.

“The State is no longer one of the leaders in employment growth; instead, it lags the nation,” Hughes and Seneca said.

The biggest factor behind New Jersey’s disappointing job-growth performance in recent years has been an enormous slide in manufacturing jobs. Over the last four and a half years, nearly a quarter of all manufacturing jobs in this State have disappeared, offsetting employment gains in other sectors of the economy.

Between December 2000 (the start of the recession) and July 2005, total manufacturing employment declined by 92,100 jobs, falling to 329,900 from 422,000, a 22 percent decrease.

These losses were particularly acute in 2001, when 40,000 positions vanished. In the two years that followed, the losses moderated, but were still significant, with a decline of 23,600 jobs in 2002 and 14,000 in 2003.

A reprieve of sorts followed in 2004 with a loss of only 7,300 manufacturing jobs, and while there were hopes that this reprieve would continue into 2005, the picture so far has been mixed. The first six months of 2005 brought heightened losses, with 7,100 jobs disappearing between January and July.

However, July brought the first gain of the year with 700 new jobs.
New Jersey’s manufacturing employment losses have been nearly universal, affecting every major industry group except pharmaceuticals.

The driving force behind these losses is the exceptionally high cost of doing business in New Jersey, costs that include employee health coverage, energy, taxation and environmental compliance.

Regional economists say the rate at which new private-sector jobs are being created is a meaningful gauge of the health of the State economy. From this vantage point, the New Jersey economy trails the nation.

The national economy created more than 2 million private-sector jobs last year, a nearly 2 percent increase, making 2004 a breakout year for the United States as a whole. By contrast, New Jersey created only 31,300 private-sector jobs in 2004, a gain of barely 1 percent. This placed the Garden State 41st in the nation in its rate of employment growth.