Governor-elect Jon Corzine discussed controlling healthcare mandates to make insurance more affordable and altering the State’s gross receipts tax during a probusiness speech to 350 business leaders at NJBIA’s December 13 Public Policy Forum.

Corzine stressed his 25 years in the private sector with Goldman Sachs and reiterated his desire to strengthen private-sector economic growth as Governor. “I believe the business climate needs to change in the State,” Corzine said. “…I do not consider business the problem, I consider it the solution.”

This was Corzine’s first post-election appearance before employers. It gave NJBIA members a chance to hear from him about what he plans to do on such important issues as the budget, taxes, and health insurance. Corzine declared that he wants “to grow the private sector job element in this State.” He also said that too much of New Jersey’s job growth has come from government, not the private sector.

To reverse the trend, Corzine said he wants to control the cost of health insurance by controlling mandates, offering more affordable plans, and promoting purchasing co-ops. “I do understand that some of the mandates we have price small business particularly out of the market and its ability to access health care.”

Facing a structural budget deficit of up to $5 billion, Corzine conceded that there would be no easy solutions. However, he wants to change the way New Jersey formulates its spending plans by replacing the annual budget cycle with two-year plans for operating budgets and five-year plans for capital budgets.

He also reiterated his call to have an elected State Comptroller to oversee how State government spends taxpayers’ money. “I wouldn’t run a company without having an independent audit going on, on a consistent basis, on the internal activities of the firm,” Corzine said. “And I don’t think we should as a State.”

On taxes, Corzine sympathized with business on two of the most onerous provisions of the 2002 Corporation Business Tax (CBT) increase—creation of a gross receipts tax (alternative minimum tax) and suspension of net operating loss (NOL) deductions. “I don’t think we should be looking at business as greedy tax cheats…,” he said. “I don’t like the gross receipts tax and I don’t understand why we didn’t have deductibility for NOLs. Those are kind of simple, basic concepts that make sense.”

During the morning program, Governor Richard J. Codey said he was proud of his accomplishments during his year as the State’s chief executive, but has more he wants to accomplish during his two remaining years as Senate President. By being straight with the people, Codey said, he could leave the office proud of the way the government was run. “A great deal of our success can be tied to our approach to governing,” he said. “We tried to govern in a different way. No BS. No fancy spin. Just plain talk.” He then waded into the audience with a wireless mike to take questions.

Following Codey, four top legislative leaders debated issues such as the gas tax, property tax reform and improving the State’s business climate. The panel, moderated by 101.5 Radio’s Statehouse Correspondent Kevin McArdle, was comprised of Assembly Republican Leader Alex DeCroce, Senate Majority Leader Bernard Kenny Jr., Senate Republican Leader Leonard Lance, and Assembly Majority Leader and incoming Assembly Speaker Joseph Roberts. Roberts pointed to measures aimed at tackling the high cost of health insurance, particularly the Mandated Health Benefits Advisory Commission, which is designed to control costs on healthcare mandates that drive up insurance costs. More broadly, he called for a balance between business interests and other interests.

“Our mission in the Legislature from my perspective is all about trying to achieve balance: balance between business and labor, balance in terms of protecting the environment and also creating a climate that allows you to get approval for projects in a timely fashion,” Roberts said.

DeCroce said he did not think New Jersey was business friendly at all. “In fact, between the onerous taxes that have been imposed these last several years, as well as the regulations that have been imposed on business, I think they’ve scared the hell out of the business community,” DeCroce said.

On the contentious issue of property tax reform, Kenny said changing New Jersey’s property tax “culture” would involve “a major war with municipalities, with county governments and with school boards.”

“To regionalize police and fire, try doing it and see the big political fight you have on your hands,” Kenny said. “We did it in North Hudson (County). It took seven years and we did it because we had very, very strong mayors…that were able to pull it off.”

Lance agreed that the issue would not be easy to solve. He said he supported the concept of a Constitutional Convention to reform property taxes, but only if spending is included as part of the debate. A proposed Constitutional Convention bill considered in 2005 would have prohibited delegates from proposing spending changes. He warned the business community, however, to watch out for proposals that would remove the requirement that residential and commercial properties be taxed at the same rate.

“Not all states do that…. That has been our tradition in New Jersey,” Lance said. “In many states, business and commercial and industrial properties are taxed more heavily than residential real estate. A convention would have the option to change that.” He added that he supports maintaining the same standard of value for commercial and residential property.

Also as part of the program, NJBIA President Philip Kirschner presented the findings of NJBIA’s 2006 Business Outlook Survey. Attendees then chose between a political panel discussion with State Democratic Party Chair Bonnie Watson Coleman, Republican State Party Chair Tom Wilson, Peter McDonough of the consulting firm Winning Strategies, and NBC Channel 4 New Jersey Correspondent Brian Thompson, that was moderated by New Jersey Network’s Political Correspondent Michael Aron; and an economic outlook panel featuring David Houston Jr., president of Colliers Houston & Co.; Clifford Lindholm III, president and CEO of the Falstrom Company; Joel Naroff, chief economist for Commerce Bank; and Matthew Wright, president of Apgar Brothers, Inc., that was moderated by NJBIA Vice President Chris Biddle.

NJBIA on December 13 presented JoAnn Trezza, Vice President of Human Resources with Arrow Group Industries of Wayne, with its 2005 Leonard C. Johnson Award for her work on behalf of the Association. NJBIA President Philip Kirschner said Trezza “has used her years of hands-on experience to provide key insights into human resources issues at a time when employers have faced some of their greatest challenges.” Among numerous activities, Trezza has been an outstanding chair of the NJBIA Human Resources Committee, where she analyzes countless bills and policy initiatives, and advises the Association on the real-world impact they will have on business.

NJBIA on December 13 presented Governor Richard J. Codey with its 2005 Paul L. Troast Award for his outstanding performance as Acting Governor. The Troast Award is presented annually to a public servant who has made an outstanding contribution to the State of New Jersey and its business community. “As Governor, Dick Codey has left his mark,” said NJBIA President Philip Kirschner. “He has been universally praised for his performance. He has brought leadership and integrity to the office of Governor at a time when it was sorely needed. He connected with the public in a way few people in public office have.”

Legislation that would have implemented key components of NJBIA’s health insurance reform plan by providing for more flexibility in the design of health plans for individuals and employers with two to 50 employees failed to win final approval in the lame duck session of the 2004-2005 legislative session, which ended January 10. However, NJBIA intends to make enactment of its health reform agenda a top priority in the new legislative session, which is already underway.

A-3359 (Cohen, Weinberg), which failed to win passage, would have made several changes to the State-regulated Small Employer (SEH) and Individual (IHC) Health Insurance markets. First, it would have instituted a modified community rating for IHC plans, enabling these plans to charge different rates based on a person’s age. A-3359 would have allowed insurance companies to vary rates by up to 200 percent. This would have allowed insurers to offer lower priced plans to younger, relatively healthy people, thus attracting more insured individuals to the system. The bill also would have increased 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. For more information, contact Christine Stearns at ext. 260.

On January 12, Governor Richard Codey signed a bill that will eliminate the 6 percent sales tax on natural gas and electricity used by manufacturers with 250 or more employees located in Urban Enterprise Zones (UEZ), except in Salem County where a 50-employee threshold applies. The bill, S-2358 (Asselta, Sweeney)/A-3484 (Greenwald, Fisher), is a key goal of NJBIA’s Agenda for Manufacturing Renewal in New Jersey. NJBIA believes that taxes on energy should be eliminated for all manufacturers, freeing up investment capital for their businesses.

Just in time to beat a federally imposed December 31 deadline, Governor Richard Codey signed legislation that will change New Jersey’s insurance laws so that employers and employees will be able to continue to get the cost savings and tax benefits available through Health Savings Accounts (HSAs). By signing the bill, A-4543 (Cohen, Russo)/S-2435 (T. Kean)/S-2574 (Rice, Bucco), Codey ensured that New Jersey would not be the only State in the nation where small businesses and their employees could not make full use of the savings that HSAs offer.

HSAs were created by the federal government to allow employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses. Unlike medical savings accounts, where funds must be spent by the end of the year or be forfeited, HSAs allow account balances to build up over time. The accounts are also portable, moving with employees if they change jobs.

Federal regulations, however, require those using HSAs to be covered by a high-deductible health insurance plan that covers hospital stays and expensive medical treatments. New Jersey did not provide for high-deductible health plans that met federal requirements. With enactment of this measure, New Jersey employers and their employees will continue to enjoy the savings that HSAs provide. For more information, contact Christine Stearns at ext. 260.

Legislation that would have forced employers to provide virtually unlimited coverage for treatment of substance abuse and behavioral problems failed to win approval in the Legislature’s 2004-2005 session, which ended January 10. A-333 (Weinberg, Johnson) would have required all health plans in New Jersey’s regulated market to provide unlimited coverage for treatment of substance abuse and expand on the current mandate to cover mental illness by requiring plans to provide unlimited coverage for a wide range of behavioral disorders. This very costly mandate would have hit small businesses the hardest because the vast majority of employers with two to 50 employees obtain health benefits from the regulated market.

NJBIA strongly opposed this measure. Imposing this costly mandate at a time when many employers cannot even keep up with dramatic cost increases of 10 to 15 percent a year would be bad public policy. Employers would be forced to increase deductibles and co-pays and have their employees pay a greater share of the premium. Some employers would no longer be able to afford insurance at all.

For more information, contact Christine Stearns at ext. 260.

Employers Must File Electronic Wage Reports in 2006

Beginning in the first quarter of 2006, New Jersey employers with 10 or more employees must submit wage reports (form WR-30) to the NJ Department of Treasury electronically. Employers will be able to file their forms online or through a Secure File Transfer Protocol (SFT) (https://sftcomm.state.nj.us) with an easy-to-use computer program. For more information, call the NJ Department of Treasury’s Alternate Filing Bureau in the Division of Revenue at 609-633-1132. Questions about Secure File Transfer Protocol, including how to register and obtain an SFT login and password, may be directed to James Cordani of the Alternate Filing Bureau at 609-984-7988.

NJBIA Plays Key Role in Corzine Transition

NJBIA Chairman Vincent Bonica participated in Governor-elect Jon Corzine’s Economic Growth Advisory Committee to develop recommendations for a Statewide economic development policy.

NJBIA Senior Vice President Melanie Willoughby, and Vice Presidents Christine Stearns and Frank Robinson also played key roles in developing recommendations for Corzine on healthcare, workforce training and transportation issues. Their recommendations will be used to develop policy initiatives for the new Administration.

Despite what was at times a difficult political climate, NJBIA can point to numerous legislative accomplishments in the 2004-2005 session. Streamlined permits, health insurance reform, increased tax deductions and other initiatives all came to fruition during the two-year legislative session that ended on January 10. All in all, NJBIA crossed off 19 bills from its “to do” list. Accomplishments included:

Health Savings Accounts (P.L. 2005, c.248)—New Jersey’s insurance laws are changed to meet the federal requirements for high-deductible health insurance plans that must accompany federal Health Savings Accounts. A-4543 (Cohen, Russo)/S-2435 (T. Kean)/S-2574 (Rice, Bucco).

Manufacturing Tax Deduction (P.L. 2005, c.127)—Allows New Jersey manufacturers to deduct on their NJ Corporation Business Taxes 3 percent of their net manufacturing income from the sale of goods manufactured within the United States. A-4294 (Cryan, Vas)/S-2638 (Bryant).

Partial Restoration of Net Operating Loss Deductions (P.L. 2004, c.47)—After two years of no net operating loss (NOL) deductions, employers in 2004 and 2005 were permitted to apply NOLs to 50 percent of their taxable income. Full restoration of NOLs took place in 2006. A-3110 (Watson Coleman, Johnson)/ S-1715 (Kenny, Bryant).

No Tax Increases and Full Restoration of Net Operating Loss Deductions (P.L. 2005, c132)—The fiscal year 2006 State Budget curtailed spending and contained no new broad taxes on business. The budget also did not extend the suspension of net operating loss (NOL) deductions, allowing them to be fully restored in 2006. S-3000 (Bryant)/A-4400 (Greenwald).

Business Ombudsman in NJ Board of Public Utilities (P.L. 2005, c.215)—The BPU business ombudsman will help companies shop for electricity and gas, and act as a centralized information resource for money-saving energy programs, subsidies and grants. A-3471 (Cryan, Caraballo)/S-2274 (Sarlo, Lesniak).

Diesel Engine Retrofit (P.L. 2005, c.219)—Instead of the costly private-sector mandate that was initially proposed, the law requires only public sector vehicles such as school buses and trash trucks to undergo diesel engine retrofits to reduce emissions. S-1759 (B. Smith)/A-3182 (McKeon, Manzo).

Liability Protection for Remediation of Environmental Contamination (P.L. 2005, c.4)—Property owners who purchased environmentally contaminated land after 1997 will not be liable for natural resource damages or cleanup of surrounding properties as a result of environmental contamination they did not cause. S-1374 (McNamara)/A-2444 (Bateman, McKeon).

Air Toxic Surcharge Repeal (P.L. 2005, c.141)—Employers no longer pay $12 million in annual taxes on facilities that generated certain air emissions. A-3667 (Sires, Van Drew)/S-2124 (Adler, Doria).

Energy Tax Cut for UEZ Manufacturers—Manufacturers with 250 or more employees located in Urban Enterprise Zones (UEZ), or those with 50 or more in Salem County will see the 6 percent sales tax they pay on natural gas and electricity eliminated. S-2358 (Asselta, Sweeney)/A-3484 (Greenwald, Fisher).

Streamlined Permits in Smart Growth Areas (P.L. 2004, c.89)—This law requires State agencies to approve permits within 90 days of receiving a complete application from businesses moving to or expanding in older suburban and urban areas targeted for growth. Implementation delayed by executive order. S-1368 SCS (Sweeney, Codey, Madden)/A-3008 (Sires, McKeon).

Teacher Technology Education (P.L. 2004, c.7)—Teachers will now be certified in teaching technology instead of being categorized as industrial arts teachers. The law recognizes the important role technology plays in modern manufacturing and changes New Jersey’s education system accordingly. A-896 (Deignan, Malone)/S-1181 (Turner, Scutari).

Minimum Healthcare Participation Rates Reform (P.L. 2005, c.166)—Employers will be able to count employees covered by Medicaid and NJ FamilyCare towards minimum participation rates needed to participate in the NJ Small Employer Health Benefits Program. S-1912 (Vitale, Sweeney)/A-3379 (Cohen, Voss).

Brownfields Revitalization Funding (P.L. 2004, c.6)—Unspent funds in the Underground Storage Tank Remediation Fund can now be used to help pay for brownfields revitalization programs. S-853 (Codey, Bryant)/A-2343 (Watson Coleman, Manzo).

Streamlined Sales Tax (P.L. 2005, c.126)—Establishes standardized sales and use tax policies in New Jersey, which has now joined 17 other states in reducing administrative costs for many retailers with multi-state operations. A-3473 (Greenwald, Watson Coleman)/S-1958 (Bryant, Buono).

NJ STARS II Program—This $1 million scholarship program will help keep some of New Jersey’s best community college graduates (and future entry-level workers) from going out-of-state to get their four-year degrees. A-4512 (Sires, Watson Coleman)/S-2905 (Bryant, Codey).

Accelerated Permits for Biotechnology Companies (P.L. 2004, c.14)—This task force will promote the commercialization of biotechnology-related products and services by accelerating environmental permit approvals for biotech companies. A-437 (Impreveduto, Chivukula)

Written Rejection of Set-Aside Program Applications (P.L. 2004, c.141)—The Division of Development for Small Businesses and Women’s and Minority Businesses in the NJ Commerce and Economic Growth Commission now must issue their decisions in writing whenever they reject an application to participate in New Jersey’s set-aside program. A-634 (Stender, Deignan).

Deterring Unemployment Tax Avoidance (P.L. 2005, c.239)—Employers will be protected from those who try to hide their risk experience from New Jersey’s Unemployment Insurance regulators under this new law designed to deter the practice of shifting employees to “dummy” corporations. S-1847 (Coniglio)/A-2941 (Egan, Manzo).

Underground Tank Removal Grant Forgiveness—Businesses that received conditional hardship grants to upgrade, remove or clean up underground storage tanks will not have to repay them if the property is condemned or subject to the power of eminent domain. A-2739 (Weinberg)/S-240 (Coniglio).

An important goal of the New Jersey Business & Industry Association is to make available to our members useful information that will help them meet the challenge of doing business in New Jersey. One way we do this is by publishing a series of Fast Facts papers that explain in detail how to deal with legal and regulatory issues important to the operation of your business. The following Fast Fact papers are designed to help you purchase health insurance coverage for your employees. They can be obtained by contacting Lisa Figatner at 609-393-7707, ext. 237. They are available at no cost to NJBIA members.

Fact Sheet #7
New Jersey Small Employer Health Benefits Program: If you employ between two and 50 employees who regularly work 25 or more hours per week, the State considers you to be a “small employer,” making you eligible to purchase small-group health coverage for your employees in most instances. Fact Sheet #7 explains your basic rights and responsibilities as a provider of health benefits under the State’s small-employer program.

Fact Sheet # 11
How to Purchase Health Insurance for Your Business: Finding all the information you need to evaluate and compare health insurance plans is difficult. Fact Sheet #11 is designed to make the process a bit easier by highlighting the different health plan options available to employers and discussing what features to look for when buying health insurance.

Fact Sheet #15
Health Savings Accounts: Health Savings Accounts (HSAs) are special savings accounts that enable qualified participants to pay for current health expenses or save for medical and retiree health expenses on a tax-free basis. HSAs were created as part of the Medicare reform legislation that was signed into law on December 8, 2003. They are available to individuals who are covered by a high deductible health plan. Fact Sheet #15 explains how to take advantage of HSAs.

NJBIA 2006 Sponsorship Program

Sign up now to participate in the NJBIA 2006 Sponsorship Program. Your company can reach specific decision makers and improve your visibility at these popular NJBIA events.

Put your name in front of key leaders of the business community and state government at our Meet the Decision Makers Breakfast Series or sponsor our Golf and Tennis Day, which attracts over 350 business leaders. Be a high-profile sponsor of our Public Policy Forum where the Governor speaks. Support our award winners at the New Good Neighbor Luncheon or the Awards for Excellence Dinner. Sponsorships start at $500. Inquire about our sponsorship packages starting at $5,000. Sponsorships go quickly, so don’t miss out. Reserve your valuable sponsorship today by calling Sherry Esteves at 609-393-7707, ext. 219.

Some of the Great Events You Can Sponsor in 2006

March-May
Meet the Decision Makers Breakfast Series

March
Made in New Jersey Day

April
Health Insurance Seminar

June
New Good Neighbor Awards Luncheon

July
Golf & Tennis Day

October
Awards for Excellence Dinner

December
Public Policy Forum

Through an agreement with Cornerstone Association Merchant Services (CAMS), NJBIA is providing payment-processing solutions for member companies that can increase their sales and lower their payment-processing costs. For the exclusive benefit of NJBIA members, CAMS has put together an excellent program that allows merchants and others to process customer payments using a variety of non-cash options, including credit cards, PIN-based debit, gift and loyalty cards, and check guarantee/conversion. CAMS can also provide companies with up to $150,000 in working capital to grow their businesses. To apply, visit www.njbiaprocessing.org or call Jeanne Jespersen at 609-393-7707, ext. 220.

ARE YOU IN COMPLIANCE?
Update Your State and Federal Employment Law Posters by Purchasing NJBIA’s All-in-One Poster Set

State and federal laws require your company to post specific labor law notices containing the most up-to-date information. This now includes the new State minimum wage rate of $6.15 per hour, which went into effect October 1, 2005. NJBIA’s three-poster set of New Jersey and federal employment laws includes all notices that currently must be posted. Please note that each of your building locations requires separate posters. Each of the three posters is approximately 26”x28”. The cost is $30 per set for NJBIA members with a bulk discount for members only: five or more sets are $25 per set. The cost is $50 per set for nonmembers (plus 6% NJ sales tax). Order your copy online or contact Chris Lopez at 609-393-7707, ext. 224.