In response to a proposal to impose what amounts to a huge tax on health benefits at large companies, NJBIA has formed the Coalition for a Competitive New Jersey to “Stop the Healthcare Tax.”   NJBIA Vice President Christine Stearns is urging all large employers to join the coalition.  Employers will find a fact sheet about the bill, a sign-up sheet for the coalition, and a link to our Voter Voice service where they can contact their State legislators.

At a time when businesses are struggling to cope with skyrocketing healthcare costs, a draft committee substitute for S-477 (Sweeney, Coniglio) would force employers with 1,000 or more employees to pay a healthcare tax.  Specifically, these employers would have to spend at least $4.17 per hour for health benefits on each employee ($8,673 annually, assuming a 40-hour work week) or pay the difference to the State of New Jersey.  Companies would be forced to spend $4.17 an hour for health benefits for part-time workers (those working more than 15 hours a week) as well. 

Furthermore, proponents of this bill have indicated they will not stop with companies with 1,000 or more employees.  They will push to impose the healthcare tax on smaller businesses as well.

The Coalition for a Competitive New Jersey will work hard to defeat S-477.  It will inform lawmakers and the media about the devastating impact this bill would have on employers and the State economy.

The $4.17 per hour, per worker minimum is NOT an average.  Companies would be required to spend $4.17 per hour for each and every worker or pay the tax.  Employers would even be responsible for the tax if their independent contractors don’t spend at least $8,673 a year.

Coverage for single full-time employees typically costs about $5,000, but under this bill the minimum an employer is required to pay would be $8,673, assuming a 40-hour work week.  In this example, the employer would have to pay the difference—$3,673—as a tax to the State.

Even when it is the employee’s voluntary decision not to enroll in a company’s health plan, the company would still be taxed.  Companies would be taxed about $30 per day, per employee if they require a waiting period before new employees can enroll in their health benefits programs.

This is an outrageous piece of legislation that will cement New Jersey’s reputation as one of the most antibusiness and uncompetitive states in the nation.  More importantly, it misses the point of health insurance reform.  Skyrocketing health insurance costs are the biggest problem as healthcare costs continue to rise at four  times the rate of inflation.  Legislators should focus on ways to contain healthcare costs because this is the only way to increase access to healthcare.  For more information, contact Christine Stearns at ext. 260.

After raising taxes by $7 billion between 2002 and 2005 only to confront an even bigger budget deficit, legislators should try to cut spending this year instead, NJBIA Vice President Art Maurice told the Assembly Budget Committee on February 23.

The committee, whose main responsibility is drafting the comprehensive spending plan that must be enacted by July 1, invited NJBIA to suggest ways to bridge an estimated budget deficit of $4 billion.  Maurice proposed restructuring the State Health Benefits Program (SHBP) to put it in line with what other states and private employers provide, cutting grant programs the State can no longer afford, regionalizing some school districts, and enacting spending cuts at the local level (40 cents of every dollar spent by the State goes to local government entities).

Specifically, Maurice said the Legislature should:

• Require current and retired employees to contribute at least 5 percent of basic SHBP plan costs and merge the traditional indemnity plan into a new Preferred Provider Organization (PPO) plan.  According to the Pension Review Task Force, these two reforms would save $500 million in a program that provides health insurance coverage to 800,000 public employees, their families and retirees.  These reforms would also bring the SHBP more in line with comparable State plans.  A 2004 Mercer Human Resources Consulting Report found that New Jersey’s plan, on average, is 25 percent more generous than plans in Connecticut, Massachusetts, New York and Pennsylvania.

• Merge K-8 school districts into their existing regional high school districts.  School aid is the largest component of local government State aid.  Of the 600 plus school districts the State provides aid to, 172 are “double districts” where taxpayers are represented by and support both a K-8 district and a separate regional high school district.  It makes no sense to have two separate school districts managing the education of the same set of students. Merging administration of the 136 K-8 districts into the 36 regional high school districts would save over $50 million in administrative costs without reducing services.

• Warn public managers at all government levels that they must look to reduce current personnel costs in anticipation of a reduction in State aid subsidies.  This will mean that vacant positions will go unfilled, some layoffs might be necessary, and employee wage and benefit givebacks will have to be requested.  In all instances, managers will need to reorganize workloads and request more from every employee on the job.

Maurice pointed out that while these actions might be painful, spending cuts are the model for putting a state’s fiscal affairs in order.  New York, Pennsylvania and Massachusetts are now looking at tax cuts and increases in spending because they made the difficult decision to reduce spending over the last four years.  The per capita state-government spending in those three states grew by less than one-half the rate of spending increases in New Jersey between 2002 and 2005.  “In New Jersey, our public sector budgets grew even when we couldn’t afford it,” Maurice told the committee.  “These states have more excess resources today because, unlike New Jersey, they better managed their budgets in the past.”

For more information, contact Art Maurice at ext. 247.

 “(The bill) misses the point.  The point is we need to work to make health insurance more affordable, to make the system as efficient as possible, and to ensure we are providing high quality care.”

NJBIA Vice President Christine Stearns on proposed healthcare tax legislation.

Legislation that would provide a preference in State-funded government contracts for goods manufactured in New Jersey was released March 2 by the Senate Community and Urban Affairs Committee.  S-1020 (Sweeney, Rice) also would authorize local governments to provide the same preference, even when they are not using State funds.  NJBIA strongly supports the measure, which is part of its Manufacturing Counts! Agenda for Manufacturing Renewal in New Jersey.  The bill now heads to the Senate Budget and Appropriations Committee for consideration.  For more information, contact John Rogers at ext. 209.

In an effort that unfairly targets employers for the health benefit plans they offer, the Senate passed legislation February 27 requiring an annual report on access to employer-based health insurance for NJ FamilyCare enrollees.
The measure, S-539 (Buono, Coniglio)/A-932 (Gusciora, Van Drew), would require the Commissioner of Human Services to report any business with more than 50 enrollees in FamilyCare, the State subsidized health insurance program for low-income families.  A-932 (Gusciora, Van Drew), was released February 23 from the Assembly Health Committee.
NJBIA opposes the measure because it is nothing more than an attempt to harass businesses at a time when they are already struggling to keep up with skyrocketing health insurance costs.  Antibusiness critics claim that too many employees enroll their children in FamilyCare because their companies’ benefit plans are not generous enough.  This is absolutely incorrect.
For more information, contact Christine Stearns at ext. 260.

Employers would pay at least $13 million more for water under legislation released February 9 by the Senate Environment Committee.  S-969 (Smith, Martin) would increase the water tax to 4 cents per 1,000 gallons from 1 cent per 1,000 gallons.  Those with water diversion permits would be taxed only on the water they consume, not on water that is returned to its source.  The money would be used for drought mitigation projects and water quality projects.

NJBIA opposes this measure because the burden of the tax would fall disproportionately on the business community.  Employers, particularly manufacturers, are among the largest consumers of water in the State.  A tax increase of just a few cents could dramatically increase the cost of doing business.  The bill now heads to the Senate Budget and Appropriations Committee.  For more information, contact David Brogan at ext. 236.

Legislation that would require businesses to withhold payroll taxes for unregistered construction contractors was released by the Senate Labor Committee on February 6.

S-468 (Sweeney) would require New Jersey employers to collect a tax of 7 percent of the total amount paid to contractors not incorporated in New Jersey and forward it to the NJ Department of Treasury on a monthly basis.  Businesses would be responsible for verifying a construction contractor’s incorporation and providing a written annual statement to each contractor detailing the total payments made on their behalf.  Businesses that fail to withhold the taxes would be subject to the same penalties as if they failed to pay payroll taxes for their own employees.

NJBIA opposes this legislation.  The business of collecting these taxes belongs to the Division of Taxation, not the hardworking employers of New Jersey.  Employers would need to establish costly monitoring and tracking systems to comply and face unfair penalties.  For more information, contact Art Maurice at ext. 247.

Don’t let the State of New Jersey micromanage your business to the point where it tells you when and for how long you must provide rest breaks for your employees.  Contact your legislators today, and tell them to
oppose S-1021 (Sweeney, Kavanaugh)/A-2220 (Van Drew)/A-2560 (Van Drew).  Use our quick and easy Voter Voice service to send a message to your elected representatives today.

This bill would require employers to provide every employee in every business a paid 15-minute rest break for every four hours of work and a 30-minute meal break after six hours of work.  Employees would be prohibited from “working through lunch.”  Employees who are essential to your business and employees in critical positions such as nurses and doctors would be required to stop working and take a break after four hours, regardless of the situation.  The bill also puts the responsibility squarely on employers for making sure employees get their mandated breaks.  Enough of this nonsense!  For more information you can go to our Membership Alert or contact John Rogers at ext. 209.

The New Jersey Department of Treasury’s Division of Purchase and Property (DPP) has stopped using the Bidders Mailing List and is now sending notices to potential bidders and vendors through the eRFP E-mail Notification Service.  Potential bidders interested in the eRFP Notification Service should visit their Web site.  For more information, visit the Department’s Web site.

Controlling skyrocketing healthcare costs, not mandating exorbitant benefit levels that force businesses to pay even more, is the way to expand the availability of employer-provided healthcare benefits, NJBIA Vice President Christine Stearns told legislators during a March 2 hearing.

“One thing is clear: the number of uninsured continues to grow,” Stearns said.  “If healthcare costs continue to increase at a significantly faster rate than income, more people will become uninsured.  Mandating that employers buy coverage, especially at artificially high rates, will not address the underlying problems in the system.”

Stearns testified before a joint meeting of the Senate Labor and Senate Health Committees on “employers’ responsibility with respect to providing health benefits coverage to their employees.”  While not addressing specific legislation, the hearings were part of an ongoing effort to force businesses to spend more on the health benefits they provide their employees.  The Senate recently passed legislation, S-539 (Buono, Coniglio)/A-932 (Gusciora, Van Drew), to report to the Governor and Legislature any company with 50 or more employees enrolled in FamilyCare, New Jersey’s subsidized health insurance program for low income families. The bill is nothing more than an attempt to harass businesses.

Additionally, some lawmakers are circulating a proposal to require employers with 1,000 or more employees to spend at least $4.17 per hour per employee on health benefits ($8,673 for employees working 40 hours per week) or pay the difference to the State as a new tax on healthcare.  The bill is structured in such a way that practically no business would be able to avoid paying at least some tax.  NJBIA has formed the Coalition for a Competitive New Jersey to “stop the healthcare tax.”

Stearns said the cost of health benefits is rising faster than salaries and wages.  Furthermore, employers are already dealing with skyrocketing health insurance costs. The NJBIA annual Health Benefits Survey of member companies found that the cost of providing health insurance increased by 55 percent between 2001 and 2004.  As a result, some employers have been forced to drop coverage altogether.

Stearns added that two-thirds of New Jerseyans, roughly 5.5 million people, obtain their health insurance through their employer.  That equates to roughly 66 percent of the population.  With costs continuing to explode, however, employers are finding it difficult to continue to offer benefits.  In the NJBIA survey, a declining percentage of survey respondents provided coverage in 2004, largely because of the exploding costs.  This was the first statistically meaningful drop in the percentage of respondents providing health coverage in the survey’s history.

NJBIA is advocating a comprehensive set of health insurance reforms, including reforms to the small business and individual health insurance markets, improving quality of care, and providing tax incentives to businesses that provide health benefits.

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

A survey of the nation’s top chief executive officers has concluded that New Jersey is one of the worst States in the nation in which to operate a business.  New Jersey’s business climate ranked 46th in the nation in the annual survey by Chief Executive magazine.

Of the factors the CEOs said were most important to the business climate, 20.6 percent said workforce quality, 18.3 percent said labor costs, 15 percent cited taxes and 14.1 percent named regulations.

The magazine said that states with more favorable business climates experience economic growth rates that are 40 percent higher than states that over-tax and over-regulate.  NJBIA has repeatedly pointed out to lawmakers that New Jersey is creating private-sector jobs at a much slower rate than most other states because its cost of doing business in areas such as taxes and regulations is just too high.

Employee Health Insurance:  How To Be a Savvy Purchaser

Getting the best health plan at the lowest possible cost is one of the most important challenges facing employers, especially small to mid-size companies. Be a savvy employee health insurance consumer.  Hear from industry professionals about the numerous health insurance choices available to your business.  Learn how to quickly compare health plans so you can choose the one that’s right for your company.  Get expert advice on purchasing high quality coverage at the most competitive prices. Find out how to benefit from setting up the new Health Savings Accounts (HSAs) for you and your employees.

This seminar will be held at the Doubletree Hotel Newark Airport in Elizabeth, from 8:30 a.m. to 12:30 p.m. The cost is $109 per person for NJBIA members and $139 for nonmembers.  To register or for more information, call Katie Wittkamp at 609-393-7707, ext. 239, or register online.  For details on exhibit opportunities, contact Sherry Esteves at 609-393-7707, ext. 219.

WEDNESDAY, MAY 10
NJBIA-Rutgers Economic Forum

Find out where the economy and key industry sectors are headed at this Economic Forum brought to you by NJBIA and the Rutgers Business School in Newark and New Brunswick.  The Forum will be held at the Doubletree Hotel, Newark Airport, Elizabeth from 7:45 a.m. to 10:00 a.m.  For more information, call Katie Wittkamp at 609-393-7707, ext. 239.  To become a sponsor, contact Sherry Esteves at ext. 219.

SPRING 2006 —
Meet the Legislative Leaders Series

At these briefing breakfasts, you will hear from the legislative leaders who pass the laws that impact your business.  State and local taxes.  Environmental fees and permits.  Healthcare costs.  Whatever the issue, these are the people who will decide how to resolve them.  Each event will begin promptly at 7:45 a.m. with breakfast and a brief overview of NJBIA’s legislative agenda, presented by NJBIA Senior Vice President Melanie Willoughby.  A panel of four legislative leaders from the area will offer their thoughts and answer your questions.  Legislators from throughout the region will also be invited to attend, making this a tremendous networking event. The program will end promptly at 10:00 a.m.

The cost for each breakfast is $69 per person for NJBIA members and $105 for nonmembers.  For more information or to register, contact Stacy Wichner at 609-393-7707, ext. 213, or register online.  For information on sponsoring these high visibility events, contact Sherry Esteves at ext. 219.  The remaining two dates are as follows:

SOUTH JERSEY — Friday, March 31    
Clarion Hotel, Cherry Hill
Assm. Budget Committee Chairman Louis Greenwald   •   Senate Labor Committee Chairman Stephen Sweeney    •   Senate Deputy Republican Leader Diane Allen   •   Assembly Republican Budget Leader Joseph Malone

NORTH JERSEY — Friday, April 7
Doubletree Hotel Newark Airport, Elizabeth
Senate Majority Leader Bernard Kenny   •   Assembly Speaker Pro Tem Wilfredo Caraballo    •   Senate Republican Whip Tom Kean, Jr.   •   Assembly Republican Leader Alex DeCroce

MEET THE DECISION MAKERS 2006

Find out what the Corzine Administration has planned for New Jersey over the next year.  In four separate breakfast meetings, you will hear from Governor Jon Corzine’s key advisors and cabinet members.  Each breakfast will run from 7:45 a.m. to 10:00 a.m. at Forsgate Country Club in Monroe Township.  The cost for each breakfast is $69 per person for NJBIA members and $105 for nonmembers.  For more information, contact Stacy Wichner at 609-393-7707, ext. 213, or register online. Contact Sherry Esteves at ext. 219 to become a sponsor.  Attend one or all of these events:

WEDNESDAY, APRIL 12 – Governor’s Key Advisor’s
Tom Shea, Chief of Staff   •   Heather Howard, Policy Counsel   •   Jeannine La Rue, Pattie McGuire and Maggie Moran, Deputy Chiefs of Staff

FRIDAY, APRIL 21 – Commerce/EDA/Economic Growth Leaders
Gary Rose, Chief, Office of Economic Growth   •   Virginia Bauer, Commerce Commission Secretary    •   Caren Franzini, CEO, Economic Development Authority

WEDNESDAY, APRIL 26 – Dept. of Environmental Protection
Lisa Jackson, Commissioner, Department of Environmental Protection

FRIDAY, MAY 5 – State Treasurer
Bradley Abelow, State Treasurer