The New Jersey economy will remain relatively strong and will continue to grow this year and next, but the State is not creating enough private sector jobs, particularly in key industries like pharmaceuticals and technology, a nationally known investment consultant told NJBIA members at the NJBIA-Rutgers Economic Forum on May 10.

Featured speaker Joseph Battipaglia, executive vice president of the investment firm Ryan Beck & Co., said he believes the New Jersey economy's glass is half full, not half empty.

Battipaglia was one of five prominent New Jersey industry leaders who spoke at the forum. They presented a mixed picture of the State economy. While the State has considerable economic strengths, such as its location and skilled workforce, there are significant weaknesses that require the attention of State government, including the loss of high-paying jobs and an aging transportation infrastructure, the speakers said. They also said the State needs to step up its business-retention efforts and foster a more business friendly climate.

Battipaglia was joined by panelists Mark Yeager of The Gale Company, one of the largest commercial real estate developers in New Jersey ; Donald Drakeman of the biotechnology company Medarex, Inc.; Bud Cass of Advanced Cerametrics, Inc., a high-technology manufacturer; and Jon Shevell of New England Motor Freight, a leading logistics company. Howard Tuckman, dean of the Rutgers Business School in Newark and New Brunswick, moderated the discussion.

Entitled A Look into the Future, the forum was a joint effort by NJBIA and Rutgers Business School in Newark and New Brunswick . The event was sponsored by AT&T, Amper, Politziner & Mattia, Fidelity Investments, Jersey Central Power & Light Company (A FirstEnergy Co.), Lowenstein Sandler, and Ryan Beck & Co.

In his address, Battipaglia predicted that New Jersey 's economy will stay strong this year and next. That's good news for a state where per capita income is 26 percent above the national average and is experiencing job growth.

But New Jersey is falling behind in key industries like technology and pharmaceuticals, he said. While the United States economy has created more than 1 million new technology jobs over the last 15 years, New Jersey has lost 10,000 technology jobs. Likewise, New Jersey 's share of the nation's pharmaceutical industry employment has fallen from 20 percent to 14 percent.

“There are changes that are happening beneath the surface that speak to a different profile of New Jersey in the next five years, which means that business leaders like yourselves have to think about remedies,” Battipaglia said.

For example, he said, New Jersey should take advantage of its strategic location; the State is poised to take advantage of the migration of financial services and other industries from New York City . “In fact, the skyline of New York really now incorporates New Jersey if you look at it from any distance,” he said.

Also, New Jersey 's ports and transportation hubs can solidify the State's position in global trade, provided they get the right capital investment. Battipaglia also encouraged the State to add incentives for manufacturers and loosen controls on energy companies.

“I don't think things are fine…,” said Yeager of The Gale Company during the panel discussion. “There are structural challenges; there are structural problems for sure. There are fundamental things that need to change. We need to make the State, from a business attraction and retention standpoint, much more attractive, a much more user friendly place in which to do business.”

The panelists said New Jersey faces stiff competition from other states when it comes to attracting businesses, particularly the high-tech businesses that have the high- pay jobs.

Cass of Advanced Cerametrics said he has received $2 million in incentives from Ohio to relocate his manufacturing operations there. (The company's executive and research operations will remain in New Jersey .) And while Medarex has become a successful company since moving here from New Hampshire , Drakemen said, he's not sure New Jersey would win out today.

“Every week, I get mailings from several different states throughout the country, offering us various state incentives to move to some other place or to help start up a company in some other location,” he said. “We've been doing quite well here in New Jersey . But if we were a little company right now (looking to move) we'd get offers from many states who put hard cash on the table.”

Shevell of New England Motor Freight said New Jersey 's transportation system needs attention. The roads on which his trucks travel were not built for today's equipment, and capacity needs to be increased. Considering that every product has to be carried by a truck at some point, ensuring that New Jersey has adequate transportation infrastructure must be a priority.

Manufacturers who purchase new equipment or upgrade their facilities would be able to take up to a 20 percent State tax credit under legislation released May 18 by the Assembly Commerce and Economic Development Committee. The bill, A-1283 (Manzo), would provide manufacturers with a tax credit equal to 20 percent of the total cost of new equipment, renovations, expansions and upgrades of a manufacturing facility. The credit would be applied to a manufacturer's Corporation Business Tax (CBT).

To qualify, the new equipment would have to be eligible for the sales tax exemption for manufacturing equipment and have a useful life of more than one year. The bill is one of the key items on NJBIA's Agenda for Manufacturing Renewal in New Jersey . It now heads to the Assembly Appropriations Committee for consideration.

The measure is designed to retain manufacturing jobs in New Jersey by bolstering an industry sector that has been hit hard by low-cost competition from other countries and other states. To survive, New Jersey manufacturers must constantly update their operations and improve their productivity. This measure would help New Jersey manufacturers compete with businesses in lower-cost states and countries. For more information, contact Art Maurice at ext. 247.

Assembly Speaker Joseph Roberts has proposed a series of initiatives to control school spending, encourage consolidation of local government units, and assist municipalities in sharing services as a way of reining in New Jersey 's runaway property tax increases. Roberts also has said the Assembly would work over the summer on a new school funding formula and hold hearings on pension reform.

Roberts' plan would remove civil service restrictions that prevent local governments from sharing services, require efficiencies from local governments in return for certain block grants, and give more authority to county school superintendents to eliminate administrative waste and cut overhead. It would also move school board and fire district elections to November.

Rising property taxes are one of New Jersey 's biggest problems and one of the most complex to solve. This package is a good start. Other pending legislative proposals, including a proposed property tax convention, deal only with new sources of government revenue, not with how the money is spent. NJBIA believes that reducing spending must be part of any property tax reform plan the Legislature adopts. For details, contact Christopher Emigholz at ext. 201.

A new law requires employers who provide health insurance to their employees to offer health insurance coverage for employees' adult dependents up to 30 years of age.

Employees are required to pay the full premium for their covered adult dependents. Employers must provide notice of extended dependent coverage immediately before the dependent reaches the age limit, before each open enrollment period, and immediately after the initial effective date of extended dependent coverage under the plan. The law applies only to health insurance purchased in the State's regulated market. To qualify, adult dependents must be under 30 years of age, unmarried, have no dependents of their own, have no insurance coverage of their own, and reside in New Jersey or be full-time students.

To obtain the NJBIA Fast Facts on the new law, which explains employers' rights and obligations, contact Lisa Figatner at 1-800-499-4419, ext. 237.

Legislation that would impose what amounts to a huge healthcare tax on large employers is the wrong approach to healthcare reform, NJBIA Vice President Christine Stearns testified recently at a Senate Labor Committee hearing. The bill, S-477 (Sweeney, Coniglio), would require businesses with 1,000 or more employees to spend up to $3.30 per employee per hour ($6,874 per year for a full-time employee working 40 hours per week) or pay the difference between this figure and actual spending as a tax to the State. Despite the business community's strong objections to the bill, the committee released the legislation, which was then sent to the Senate Budget and Appropriations Committee for further consideration.

At a time when employers are struggling with skyrocketing premium increases, NJBIA believes that forcing businesses to spend more on healthcare is just wrong. This bill does not address the exploding cost of health insurance, which is the root cause of the uninsured problem. NJBIA has proposed a comprehensive plan of insurance reform that would provide employers with more affordable health insurance choices, reduce medical mistakes and duplication, and offset soaring costs with tax credits and deductions.

S-477 would instead cement New Jersey 's reputation as an antibusiness State by mandating that companies spend a certain amount on health insurance for every employee working more than 13 hours per week or pay a tax to the State. For more information, contact Christine Stearns at ext. 260.

The Assembly Commerce and Economic Development Committee recently took up the issue of reforming New Jersey 's eminent domain laws, taking testimony from legislators on 11 separate proposed reforms. None of the bills received a committee vote, but rather served as a starting point to debate how, and to what degree, local governments should be able to take private property for public use through condemnation proceedings. NJBIA applauds the committee's effort.

Eminent domain should be used only in limited circumstances, and measures should be added to protect business-property owners from abuse. In New Jersey , less developable land, dramatically higher property values, and a scramble for more property tax ratables have created a “perfect storm” that is pressuring local governments to use eminent domain.

NJBIA supports reforms that would tighten the definition of what constitutes “blight” or an “area in need of redevelopment,” provide greater public access to information, offer more opportunities for public comment, increase compensation for business property owners, ensure a substantive method to appeal a designation of blight, and add pay-to-play protections.

Vice President David Brogan said NJBIA is urging the Legislature to protect the interests of business in rewriting the State's eminent domain laws. “The intrinsic value of a business's location must be taken into account when a business property is condemned,” Brogan said. “In the past this has not been done.” Contact David Brogan at ext. 236.

“The idea that we can solve the problems with our health insurance system by making businesses pay more is ludicrous.”

- NJBIA Vice President Christine Stearns, stating NJBIA's opposition to a proposed healthcare tax.

Legislation aimed at increasing the use of money-saving electronic medical records by New Jersey hospitals has been released by the Senate Health Committee. S-852 (Bark) would create a task force to identify which technologies would be most effective in reducing duplication and errors at hospitals. The task force would recommend incentives to encourage hospitals to use these technologies. Greater use of electronic medical records is a key element of NJBIA's health insurance reform plan.

With New Jersey employers' health insurance costs rising at three times the rate of inflation, the State cannot afford costly medical errors, duplication, and high administrative costs. A Dartmouth University study estimates that as much as one-third of the nation's healthcare spending goes to duplicative tests and procedures that do little to improve a patient's health.

Despite receiving more bad budget news the day before, New Jersey State Treasurer Bradley Abelow said the Corzine Administration is still committed to fixing New Jersey 's fiscal problems for the long-term and will not resort to wide use of budget “gimmicks” to plug a $4 billion budget deficit. Abelow spoke to NJBIA members at the final Meet the Decision Makers breakfast on May 5. Even though State-revenue collections are $300 million below projections, he said, the shortfall would be dealt with through additional budget cuts, not one-time revenue sources.

Abelow said the Administration remains committed to improving the business climate in New Jersey . That's why it did not propose suspending net-operating-loss (NOL) deductions again. He cautioned, however, that some legislators are looking at NOL deductions as a way to increase revenues, and he encouraged businesspeople to speak out on the need for those deductions. “If our Legislature does not hear from you on this issue, then you will have to keep sending in the checks,” he warned.

The May 5 Meet the Decision Makers breakfast was sponsored by Altria Corporate Services Inc., AT&T, Bank of America, Fidelity Investments, Jersey Central Power & Light (a FirstEnergy Company), MyWireless.org, NJM Insurance Group/NJM Bank FSB and Verizon.

NJBIA has made available online a complete list of the Legislative Briefs it has prepared on the most important bills it is following in the current session of the State Legislature. They cover bills concerning health insurance, business taxes, energy costs, environmental regulation, economic development and many other issues of interest to business. Each of the 61 Legislative Briefs in our current listing provides a description of the bill, its status in the Legislature, an analysis of how it would impact your business, and NJBIA's position. If you are an NJBIA member, you can access the full list of briefs by visiting www.njbia.org/issuesid.asp, or you can send an e-mail to Joanne Gordy.

The NJBIA Board of Trustees has promoted Sara Bluhm to assistant vice president for energy affairs and federal issues. Bluhm heads up NJBIA's efforts to make electricity and natural gas more affordable, and she handles key issues like alternative energy and the Regional Greenhouse Gas Initiative (RGGI). She also serves as executive director of NJBIA's research affiliate, the New Jersey Policy Research Organization Foundation (NJPRO), which prepares detailed analyses and research papers on key business policy issues. Bluhm joined NJBIA in 2000 and has handled environment, labor and other issues throughout her career. Sara Bluhm may be reached at ext. 204.

NJBIA membership plaques are available to members at no cost. To request one to display in your workplace, please contact Amy Muzyk at 609-393-7707, ext. 226.

The NJBIA Energy Council held its spring meeting recently, which was led by Council Chair John Parodi, who is senior energy manager with Hoffman-La Roche Inc. The Council's guest speakers were Keith McCoy, vice president of energy and resources policy with the National Association of Manufacturers, and Siddika Pasi of the Rutgers Center for Advanced Energy Systems (CAES).

McCoy briefed the group on the recently enacted federal Energy Policy Act of 2005, as well as other emerging energy issues. He said the big winners under the new act are nuclear power, coal power, infrastructure and innovation. A copy of McCoy's PowerPoint presentation can be obtained here.

At its previous meeting, the Energy Council had recommended that Governor Jon Corzine's Administration expand free energy-efficiency audits for business ratepayers. These audits show employers how to conserve energy and reduce their energy bills. NJBIA had urged the Administration to spend a portion of a business-energy surcharge on CAES energy audits for commercial and industrial customers. The NJ Board of Public Utilities (BPU) subsequently authorized the CAES to provide up to 650 free audits over the next 18 months. Pasi briefed the Council on the plans for the program and said that companies interested in an audit should visit the Center's Web site at www.eagl.rutgers.edu or contact them at 732-445-5540.

In addition, a number of topics relating to the BPU were covered including clean energy, the newly created position of BPU Ombudsman, and the need for more transparency in BPU decision-making.

• Transparency—NJBIA is working with BPU President Jeanne Fox to improve the way the Board works with business. Over the next few months the Council hopes to begin working with the Ombudsman to make it easier for businesses to get information from the BPU and to improve the BPU's Web site.

• Clean Energy—NJBIA is encouraging companies to apply for the New Jersey Clean Energy Awards, which are to be presented at the annual conference in September. In addition, companies are encouraged to apply for grants and rebates to lower the cost of installing energy-saving equipment. Information on how to apply for the awards can be found at www.njcleanenergy.com.

• Ombudsman—The position of BPU Ombudsman remains vacant. The Council looks forward to the State hiring an Ombudsman, who is supposed to work with business to develop a better energy climate and lower business costs for commercial and industrial energy users.

The NJBIA Energy Council brings together employers and utilities to discuss issues of mutual concern and to meet with officials responsible for the State's energy policies. If you are interested in becoming a member of the Energy Council or would like more information about it, contact Sara Bluhm.

NJBIA's Economic Development Council, chaired by Tim Carden of the Public Private Strategy Group, recently held a meeting with Angie McGuire and Kevin Drennan, key officials with the newly formed Governor's Office of Economic Growth (OEG), to discuss its mission and work and how NJBIA members can participate.

McGuire, deputy chief of the Office of Economic Growth, spoke about the pro-business aspects of Governor Corzine's proposed fiscal year 2007 State Budget. She urged the business community to get behind the Governor's efforts to strengthen New Jersey 's business climate.

McGuire and OEG Director of Business Relations Drennan asked Council members to alert them to companies that could be encouraged to expand in New Jersey or move here. They said the OEG is working closely with the State Commerce Commission and Economic Development Authority.

The Economic Development Council is made up of NJBIA members who guide the Asso-ciation on economic issues. If you are interested in becoming a member of the Economic Development Council or would like more information about it, contact Art Maurice.

Twelve construction projects, involving everything from a renovated 18th century tavern to a $250 million expansion at an Atlantic City casino, were honored Friday, June 2, at the 46th Annual New Good Neighbor Awards Luncheon. Hosted by NJBIA and New Jersey Business magazine, the New Good Neighbor Awards Luncheon annually brings together 250 builders, architects, engineers and others in the development community to honor those responsible for much of the State's impressive new commercial construction and renovation.

New Good Neighbor Awards-- 2006 Winners

Cadbury Schweppes Science & Technology Center
Whippany

Chemical Sciences Building–Princeton Forrestal Campus
Plainsboro

Cornerstone Commerce Center
Linwood

Fox + Hound Tavern
Lebanon

Meadow Wood Manor
Randolph

Park Place - Advance Realty Group
Florham Park

Roma Bank
Robbinsville

The 570 Broad Street Building
Newark

The Palace at Somerset Park
Somerset

Tropicana Casino and Resort–Home of The Quarter
Atlantic City

—Special Projects—

City of Elizabeth Fire Headquarters
Elizabeth Fire Prevention Bureau, Division of Training
Engine 7, Ladder 1, Rescue 1
Elizabeth

UMDNJ - Robert Wood Johnson Medical School,
Child Health Institute of NJ
New Brunswick

NJBIA Thanks Its 2006 New Good Neighbor Luncheon Sponsors:

Advance Realty Group
Building Contractors Association of New Jersey
DCH Auto Group
Providence Pediatric Medical Day Care, Inc.
Public Service Electric and Gas Company
Skanska USA Building Inc.
Wachovia

Wednesday, September 27
Meet NJ's Top Two Legislative Leaders

Hear directly from New Jersey 's two most powerful legislative leaders, Senate President Richard Codey and Assembly Speaker Joe Roberts. This event will be held at the Forsgate Country Club in Monroe Twp. from 7:45 a.m. until 10:00 a.m. Plenty of time will be set aside to answer your questions. Don't miss this informative networking event. Cost to attend is $69 per person for NJBIA members and $105 for nonmembers. To register, call Katie Wittkamp at 609-393-7707, ext. 239. To become a sponsor, contact Sherry Esteves at ext. 219.

Tuesday, July 18
Golf & Tennis Day

NJBIA will hold its 36th Annual Golf and Tennis Day at the Forsgate Country Club in Monroe Township (off Exit 8A-NJ Turnpike). This event is one of the State's major business outings, attracting 300 golfers each year. The cost per person is $260 for golf and dinner, $145 for tennis and dinner, and $99 for dinner only. For more information, call Stacy Wichner at 609-393-7707, ext. 213 or download the fax-back registration form. Heighten your company's visibility by becoming a Golf Day sponsor; contact Sherry Esteves, ext. 219.

October 2006 (tentative)
Made in New Jersey Day

If your company makes a product in New Jersey , you can showcase it by becoming an exhibitor at NJBIA's Annual Made in New Jersey Day, which will be held on a date to be determined in October at the State House in Trenton . There is no cost to exhibit! You can also provide a Jersey-made product sample for our New Jersey Sampler Bag. If you are a manufacturer and member of NJBIA and would like to be an exhibitor, a Sampler Bag contributor or an event sponsor, contact Alex Hollywood at 609-393-7707, ext. 262, or Sherry Esteves, ext. 219.

Tuesday, October 17
Awards for Excellence Dinner

On October 17, NJBIA member companies that have achieved excellence in activities related to human resources management, job creation, environmental quality, and public service will receive NJBIA's Award for Excellence during a dinner at the Hilton, East Brunswick (Exit 9, NJ Turnpike). Established in 1984, the Awards for Excellence program recognizes companies of every size from small, family-owned enterprises to Fortune 500 companies. The program begins at 6:00 p.m. and will include a reception, dinner and the awards presentations. The price is $149 per person. Tables of ten are available. To register, call Stacy Wichner at 609-393-7707, ext. 213, or click on “Events and Programs” at www.njbia.org. To become a sponsor of this event, contact Sherry Esteves, ext. 219.

2006 NJBIA Sponsor Opportunities

Every year, NJBIA holds more than 20 high-profile events that attract thousands of employers from across New Jersey . These events give our sponsors a great opportunity to reach a large and responsive business audience. You can sponsor one event or several events. Visit www.njbia.org and click on "Events and Programs" for more details or call Sherry Esteves at 609-393-7707, ext. 219.