Junior Achievement Inducts Three Into Business Hall of Fame April 19 Read
More than 45 Business Owners Blast Paid Family Leave Bill at Labor Committee Meeting Read
Labor Commissioner Vows Service for the Business Community Read
Getting the Full Benefit: The NJBIA Member Resource Center Read
Get the Help You Need to Expand Your Business Read
Legislative Scorecard Read
Ask the Experts: The Basics of Healthcare Read

Governor Jon Corzine recently proposed a $33.3 billion fiscal year 2008 budget that would not raise taxes, would eliminate the double taxation of S corporations, continue the elimination of the alternative minimum assessment, and provide increased property tax relief to homeowners.

In his annual budget address, Corzine also lamented New Jersey’s long-term fiscal outlook, pointing to structural problems and pledging to change the budget process for the future.

“The budget I present to you is in far better shape than it has been in years,” Corzine said in his address.  “There are no new taxes and no old gimmicks... But when we look to the long-term, the situation is filled with challenges.  Now is the time to change the paradigm.”

The proposed budget would increase spending by 7 percent over this year, mostly for direct property tax relief and increased State aid to municipalities and school districts.  It also funds property tax credits the Legislature passed earlier this year, providing credits of 10 to 20 percent to homeowners with annual household incomes of up to $250,000.  That bill awaits the Governor’s signature.

The budget also assumes savings from a contract agreement with State employees that was announced on February 21.  That contract would provide raises but would also, for the first time, require employees to contribute 1.5 percent of their salary towards health benefits and increase the amount they contribute to their pensions.  The contract must be ratified.

It is also the first budget in six years that does not propose new taxes or tax and fee increases.  In fact, it would end the double taxation of 107,000 S corporations, saving them $40 million a year.  Right now, S corporations pay a corporate tax, and their shareholders pay income taxes on their share of the profits.  The budget also includes costs for probusiness tax changes enacted last year.  It assumes a loss of $35 million in revenues from fully restoring deductions for net operating losses and $160 million from the elimination of the alternative minimum assessment.  All told, the budget provides $235 million in business tax relief.  For more information, contact Art Maurice at ext. 247.

The double taxation of S corporations in New Jersey could be a thing of the past.  The corporate tax on S corporations is set to expire on June 30, and Governor Jon Corzine has indicated in his proposed budget that he will not renew it.  Elimination of the tax will save 107,000 mostly small businesses about $40 million annually.

Typically, S corporations are not taxed on their corporate income.  Instead, shareholders pay income tax on their portion of the profits.  In New Jersey, however, S corporations pay corporate taxes on their profits in addition to income taxes on shareholders’ income.

Eliminating the double taxation of S corporations has been a long-term NJBIA goal.  In 2001, then Governor Donald DiFrancesco signed legislation to phase out the corporate tax on S corporations over three years, only to have Governor James McGreevey halt that phase-out in 2003.

Governor Corzine deserves credit for recognizing the detrimental impact this tax has had on New Jersey’s business climate.  For more information, contact Art Maurice at ext. 247.

Businesses can now access online status reports concerning their environmental permit applications, the NJ Department of Environmental Protection (DEP) recently announced.

The site is called Pending Permit Progress Report and can be accessed on the DEP Web site.  Applicants and the public can use the site to check the status of applications for brownfields cleanup, water quality, emissions, wetlands development and solid waste permits.

The Web site will identify the DEP staffers assigned to handle the applications and related deadlines.  The site will also provide a contact name and telephone number for answers to questions about pending permits.  The site will use red text to indicate that a permit-application review has been stopped for administrative or technical deficiencies.  Green text will indicate when information was received to correct the deficiency and restart the review process.  For more information, contact David Brogan at ext. 236.

The New Jersey Business Hall of Fame (NJBHOF), founded in partnership with NJBIA, Junior Achievement and The Star-Ledger, has been established to honor New Jersey business leaders who are role models to today’s youth. 

On April 19, the Business Hall of Fame’s first three laureates will be honored with lifetime achievement awards in recognition of their outstanding accomplishments in their industries and for their commitment to improve the quality of life in New Jersey.  The 2007 honorees will be: Pamela J. Craig, CFO, Accenture; Kurt M. Landgraf, President  & CEO, ETS; and Paul M. Pantozzi, Chairman & CEO, The Provident Bank.

The awards dinner will take place at The Mezzanine, 744 Broad Street in Newark, with Verizon as the title sponsor and HSBC and Accenture as the platinum sponsors.  The evening’s emcee and keynote speaker will be Michelle Caruso-Cabrera, a co-anchor of CNBC’s “Worldwide Exchange” and “Morning Call.”

Doors open at 6:00 p.m.  The event will include a cocktail reception, auction, dinner, and award ceremony.  Proceeds from this dinner and awards ceremony will benefit Junior Achievement, which brings the real world to the classroom and after-school settings with hands-on experiences that teach young people about business and economics.  To register for the event, please contact Dawn Schwartz at 973-533-1133.

More than 45 business owners and executives blasted legislation that would impose a 12-week paid family leave mandate on all businesses.  They voiced their opposition during a recent Senate Labor Committee meeting in Trenton.

Joining NJBIA President Philip Kirschner in testifing against the bill were Joe Teti, president of Triangle Art in Lawrenceville; Joe Kelly, president of the Atlantic City Regional Mainland Chamber of Commerce; and Lori Anne Oliwa, a vice president with the New Jersey Association of Women Business Owners (NJAWBO) and owner of Merchant’s Choice Card Services of Matawan.  The committee ended testimony before all of the businesses could be heard, but did allow them to submit written statements.

Despite broad opposition to the bill, committee members voted 3 to 1 to release it, with Senator Robert Littell providing the lone “no” vote.  Because of the opposition of employers, however, S-2249 (Sweeney, Buono), was sent to the Senate Budget and Appropriations Committee instead of going directly to the full Senate for a vote.

Under the bill, employees would receive up to $502 per week for 12 weeks in temporary disability benefits.  Employers could not require employees to use more than two weeks of their paid sick or vacation time first.  Unlike the existing State and federal unpaid family leave laws that apply only to companies with 50 or more employees, this paid family leave mandate would apply to hundreds of thousands of small businesses throughout the State.

There is no small business exemption!

Kirschner told the committee that the mandate would be unworkable for the State’s employers.  “The State should give its employers some credit,” he said.  “Businesses work with their employees to balance work and family life.  However, employers need the flexibility to operate their workplaces.  A one-size-fits-all mandate does not take into account the differences between the small bakery, medium-sized manufacturer or large hospital.”

Kelly pointed out that these bills will be an “administrative nightmare” for small employers.  “The cost of increased overtime and hiring temporary workers will hurt small businesses,” he said.  “Additionally, productivity will fall.”

Oliwa said that having key employees out for as long as three months will put an additional burden on other workers. 

“Requiring other employees to absorb the extra work only works if there are additional employees to rely on,” Oliwa said.  “Many of the businesses I represent have only one, two or three employees, and this legislation would devastate their operations, maybe even force some completely out of business.”

Finally, Teti pointed out that the bill would compound New Jersey’s reputation as an anti-business state and hurt an already sluggish State economy.  “The evidence of economic malaise is all around us, yet we keep our heads buried in the sand and continue to make the mistakes that got us in this mess.”

Many more employers who could not be at the committee hearing got their message across by e-mail.  Responding to an NJBIA Alert on the bill, NJBIA members sent nearly 5,000 messages to legislative leaders and the Governor’s office opposing the mandate.  To register your opposition to the bill, contact your legislators using our quick and easy Voter Voice system.  For more information on S-2249, contact John Rogers at ext. 209.

“The evidence of economic malaise is all around us, yet we keep our heads buried in the sand and continue to make the mistakes that got us in this mess.”

—Joe Teti, president of Triangle Art, Lawrenceville, testifying against the proposed paid family leave mandate.

When Labor Commissioner David Socolow recently talked with NJBIA members about his department’s mission, he focused on the important steps the NJ Department of Labor and Workforce Development (LWD) was taking to fulfill its “economic development” mission. 

Socolow spoke to about 90 business people February 21 at NJBIA’s Meet the Decision Makers briefing.  He explained how LWD provides services that can help businesses grow.   He made it clear that from his perspective, LWD plays a key role in promoting a healthy business climate and implementing Governor Jon Corzine’s economic growth strategy.

Socolow was joined by several members of his department, who set up information tables and talked informally with NJBIA members about job training programs, wage and hour compliance, unemployment insurance and other programs. 

Socolow indicated that LWD plays many roles, but emphasized its workforce training efforts.

“The Department leads a suite of workforce development programs to meet the needs of employers by building the knowledge, skills, and innovation-based workforce that can compete for the well-paying, higher-skill jobs for which New Jersey has a strong competitive advantage,” Socolow said.  “Workforce development is economic development – that’s the key to Governor Corzine’s economic growth strategy.”

DOL operates One-Stop Career Centers that help employers and job seekers.  Employers can use the centers to search for workers who fit their qualifications.  The centers will set up and host interviews when a business is ready to hire.

Socolow said the Department will concentrate its workforce training efforts on occupations it knows will be in greater demand in the future. 

“We realize that in these tight fiscal times we need to make better, more targeted use of our limited resources.  So we are now focusing our investments on developing the skills of incumbent workers in industry sectors with the potential for above-average rates of growth in above-average-wage jobs.”

Up to $18 million in grants have been dedicated for job training in the areas of pharmaceuticals and biotechnology, energy, science and technology, logistics, finance, information technology, and hospitality and tourism.  DOL recently awarded the first $5.5 million in grants to upgrade the skills of 17,000 workers in those seven sectors.  The application process for the second round of grants has just concluded, with more than 90 applications filed for that round.

Socolow also said he would be very surprised if Governor Jon Corzine proposed diverting tax revenues from the Unemployment Insurance (UI) fund to balance the State budget.  (The Governor proposed no such diversion during his budget address.)  With the UI balance now below $600 million, a diversion could have triggered an automatic payroll tax hike of $350 million. 
Socolow said the State should rebuild the fund’s balance now.  “We should be building up reserves in the trust fund during good economic times like we have seen in the past few years, so that we will have a robust fund to pay benefits during an economic downturn without requiring a badly-timed tax increase,” he said.

The NJBIA Member Resource Center

As an NJBIA member, you can tap into many valuable benefits, programs and services designed to help you meet the challenge of doing business in New Jersey and succeed.  However, have you ever found yourself wondering where to find those resources?  NJBIA’s new online Member Resource Center, located at http://www.njbia.org/resources, is designed to help you identify and access them in one convenient place.  To make things even easier, we have divided our resources into five easy-to-navigate sections, as listed below.

Money-Saving Programs
NJBIA is your link to exceptional money-saving benefits, and this section of the Resource Center puts them all at your fingertips.  Here you can find information about the insurance benefits available through New Jersey Manufacturers (NJM), our discount shipping program, our credit-card processing program, and other money-saving programs.

News & Information
As an NJBIA member, you receive a steady stream of reliable, practical information to keep you informed about key business trends and issues.  At the Resource Center, you have easy access to both current and archived editions of our weekly and monthly publications, along with links to sign up for each of our e-mail Issue Networks, which deliver breaking news while it’s hot.  You can also link to our flagship publication, New Jersey Business magazine, and download our annual Business Outlook Survey and Health Benefits Survey reports.

Special Information Resources
How do you comply with new workforce regulations?  Where can you get low interest loans for expansion?  What steps should you take to get a workforce training grant?  What is important to look for when buying health insurance?  This section of our Resource Center is the place to find specialized information such as employee pay and benefit guides, legal compliance guides, as well as our Great Internet Links, which highlight the best third-party resources available to you online.  In this section, you will also be able to access resources to help your small business grow, train your workforce and run a lean and more profitable operation.

Issues & Advocacy
While you are busy running your company, NJBIA is your advocate in Trenton.  Our Government Affairs staff is the largest and most influential of any business organization in the State, and they work exclusively for NJBIA members.  But NJBIA does more than lobby the Legislature.  We give you valuable information about the State’s legislative and regulatory activities.  Here you can find information on the top issues impacting your business and order exclusive member resources like our Fast Facts and Legislative Briefs, which explain key issues, and new laws and regulations.  You can also find quick links to contact your legislators and respond to our Membership Alerts.

Networking
This final section of our Resource Center details a very important benefit of NJBIA membership, your ability to network with other members and make valuable connections with industry peers, as well as leaders in business and State government.  Here you can find links to our Employer Legislative Committees (ELC) monthly meetings, policy committees, site visit program and all of our events and seminars.

If you own a small New Jersey-based business and would like to get help expanding your operations, you can find assistance through NJBIA’s new partnership with the NJ Small Business Development Centers (NJSBDC).

The NJSBDC, which has offices in every county of the State, is dedicated to helping small businesses expand operations, manage growth or launch new ventures.  NJSBDC consultants provide free counseling to small business owners on financing, marketing and managing their companies.

Through NJBIA’s new partnership with the Small Business Development Centers, NJBIA members will receive a 20 percent discount on a new series of SBDC workshops designed specifically to help established small businesses move to the next stage in their development.

The Next Stage Business Growth series consists of nine workshops.  The entire series will be held in three locations:

•     Rutgers University, Camden Campus, April—June
•     Raritan Valley Community College, North Branch, March—May
•     Bergen County Community College, Hackensack, September—November

NJBIA members who take all nine workshops would be entitled to a total savings of $268.  For companies with one to 24 employees, the value of this savings would be greater than the annual cost of their NJBIA membership.

Participants in each of the workshops will be given the opportunity to interact with other course participants in a variety of activities.  They will also be given tools, resources and information that will reinforce course concepts and have immediate practical application.

As part of the partnership agreement, NJBIA members who seek counseling with the SBDC’s regional consultants will be given high priority.

To learn more about the Next Stage Business Growth workshops or to register for them online, visit the NJBIA/SBDC partnership page of the NJBIA Member Resource Center.  To sign up for free consulting or to get help from NJSBDC staff, call 800-432-1565.

NJBIA is working on the following bills in the current session of the State Legislature.

A-1044  (Van Drew, Johnson)
Requires 90-day notification of layoffs (federal law is 60 days) and imposes harsh severance payment penalties on companies that miss the notification deadline. 
Status: Passed Assembly/pending final Senate action
NJBIA Position: Oppose

A-1511 (Oliver, Greenstein)
Increases cost of liability insurance by expanding the available damages and the people who can sue under the wrongful death act.
Status: Released by the Assembly Judiciary Committee/pending in the Assembly Financial Institutions Committee
NJBIA Position: Oppose
 
A-1616 (Burzichelli, Conaway, Chivukula, Van Drew, Manzo)
Imposes a new mandate on managed care insurance plans that increases health insurance costs.  It would require the network to accept any healthcare providers willing to meet terms of contract.
Status: Pending Assembly Floor action
NJBIA Position: Oppose

S-807 (Vitale, Buono)/A-2512 (Gordon, Johnson)
Increases health insurance costs by requiring all State-regulated health plans to provide unlimited coverage for treatment of behavioral disorders and substance abuse.
Status: Passed Senate/pending in the Assembly Appropriations Committee
NJBIA Position: Oppose

SCR-58 (Sweeney)
By constitutional amendment, prevents diversion of unemployment insurance and other payroll taxes to the State Treasury.
Status: Passed Senate Labor Committee/pending in Senate Budget and Appropriations Committee
NJBIA Position: Support

A-3938 Burzichelli, Fisher/S-2491 (Sweeney)
Allows point-of-sale sales tax exemption for Urban Enterprise Zone (UEZ) business purchases by business located only in UEZ.
Status: Released Assembly Commerce Committee/pending in Assembly Budget and Senate Labor Committees
NJBIA Position: Support

For more information, contact Melanie Willoughby at ext. 205.