Budget Cuts and Spending Reforms Are Only Way NJ Can Return to Fiscal Sanity Read
2008-2009 Legislative Priorities Read
Incentives, Not Mandates, Are the Best Way to Reduce Carbon Emissions, NJBIA Says Read
NJPRO Report: High Taxes are Damaging the NJ Economy Read
Ask the Experts: Manage Your Energy Costs Read
NJBIA's Awards for Excellence Call for Nominations Read

Reducing overall spending is a necessary first step in breaking the cycle of ongoing budget shortfalls and financial instability that have plagued New Jersey for the past 15 years, NJBIA First Vice President Art Maurice told the Senate Budget and Appropriations Committee on March 20.
Maurice praised the goals of the budget proposed in February by Governor Jon Corzine because it tackles the State’s structural budget deficit (the difference between recurring revenues and ongoing expenses) by cutting spending.

“While Governors have come and gone, the one constant in Trenton has been the annual hunt for new money to fund State spending that we simply could not afford,” Maurice told the committee.  “So Governors have resorted to annual gimmicks to balance the budget, such as diverting nearly $5 billion in unemployment insurance trust fund revenues, issuing $14 billion in long-term debt, and raising business, income and sales taxes.  Despite these extraordinary efforts, our structural deficit today is little changed.”

“Reducing overall spending, as the Governor proposes, is a necessary first step in breaking the cycle of structural deficits.  While reasonable people can question individual budget cuts, and certainly this Committee will make budget changes, we urge you to retain the Governor’s goal of a budget that reduces overall spending below current levels,” Maurice said.

NJBIA supports the constitutional amendment sponsored by Senators Leonard Lance and Ray Lesniak (SCR-39), which would prevent State authorities from increasing taxpayer-supported State debt without voter approval.  NJBIA also supports the Governor’s proposal to limit future spending increases to growth in recurring revenues, which should be done through a constitutional amendment as well.

If State spending is cut, as pro-posed, it would be only the second time in more than 50 years that this has happened, the last time being in 1993.  State spending has increased from $243 million in 1955 to $33.47 billion in fiscal year 2008 (which ends June 30), a rate of increase that boggles the mind.

The New Jersey Business & Industry Association also recommends the State and its agencies not enact any new programs that would require new staff and funding, such as paid family leave, and that it take steps to grow the State’s revenue base by encouraging private-sector investment and job creation. 

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

In the current legislative session, NJBIA is trying to stop many antibusiness bills and is advocating bills promoting regulatory relief and energy efficiency funding.  The complete list of our 2008-2009 priorities will be updated regularly.  If you have any questions, please contact me at 609-393-7707, ext. 205.

Paid Family Leave
A-873 (Albano) provides workers in all businesses with paid leave benefits of up to six weeks a year.  The employer may require that the employee use up to two weeks of employer-provided sick or vacation time.  This bill is now on the Governor’s desk.  Only California now offers a paid leave program.
NJBIA Position: OPPOSE

Mandated Health Benefits Review
A-2255 (Greenwald, Conaway) requires the Mandated Health Benefits Advisory Commission to study the financial impact of all State-mandated health benefits.  NJBIA opposes many existing mandates because they increase health insurance costs by up to 20 percent, limiting the ability of employers to provide employee coverage.
NJBIA Position: SUPPORT

Tax on Rain (Yes, Rain)
A-2411 (Wisniewski)/S-1166 (Smith) permits municipalities, counties, and other regional entities to create and operate storm water utility systems by imposing user fees and issuing bonds.  The fees imposed on property owners would be based on the amount of rainwater that runs off their parking lots and driveways.
NJBIA Position: OPPOSE

Energy Efficiency Funds for Business
A-616 (Karrow, Chivukula) would provide for a more equitable distribution of energy-efficiency funds to businesses.  Currently, businesses pay a larger share of the “societal benefits” energy tax, but receive a smaller portion of the tax revenues used for clean and renewable energy projects.  The bill apportions the funding more fairly between residential customers and commercial/industrial customers.
NJBIA Position: SUPPORT

Contract Preference for Manufacturers
A-1479 (Burzichelli) requires State agencies to give limited preference to qualified manufacturers in bid awards.  The bill is not intended to eliminate out-of-state competition, but to give New Jersey manufacturers a competitive edge to compensate for the higher cost of doing business in this State.
NJBIA Position: SUPPORT

Regulatory Relief for Small Business
A-832 (Chivukula, Schaer, Fisher, Love) updates the NJ Regulatory Flexibility Act by requiring State agencies to review rules up for re-adoption, ensuring that they have minimal impact on small businesses.  The bill also revises the definition of small business to include not only businesses with fewer than 100 full-time employees, but also businesses which have gross annual sales of less than $6 million. 
NJBIA Position: SUPPORT

Spending Reforms
ACR-151 (Albano, Milam)/SCR-39 (Lance, Lesniak) prevents State authorities from increasing taxpayer-supported State debt without voter approval.
NJBIA Position: SUPPORT

State Budget Transparency
ACR-164 (Roberts, Quigley, Schaer, Watson Coleman, Greenwald, Greenstein) requires that State legislators make public their requests for changes to the Governor’s State budget recommendations.
NJBIA Position: SUPPORT

Now Available
Visit www.njbia.org/issues.asp

Laws of 2006-2007
In the last legislative session, New Jersey enacted more than 80 laws impacting the business community in one way or another.  NJBIA has made available a summary of the laws of the 2006-2007 Legislative Session that impact businesses. 

In order to reduce greenhouse gases without hurting the economy or putting New Jersey businesses at a competitive disadvantage, the State should provide financial incentives to commercial and industrial electricity users for renewable-energy projects and energy efficiency upgrades, Assistant Vice President Sara Bluhm said March 19.

Bluhm testified before three State agencies on ways to reduce greenhouse gas emissions as part of the Regional Greenhouse Gas Initiative (RGGI).

As part of RGGI, the State will auction carbon credits to electricity producers and use the money collected to pay for clean-energy projects, such as solar power, wind power, and energy efficiency upgrades.  Bluhm said the best approach is to provide financial incentives to help private-sector businesses overcome the high initial costs of alternative energy projects.  “We need to protect the environment, but we also need to protect our economy,” Bluhm said.  “The best way to do that is to encourage and assist, not mandate and regulate.  Renewable energy and increased efficiency make good business sense.... but the problem is paying for the technology upfront.”

Bluhm noted that private-sector investments in clean energy have a proven track record of reducing greenhouse gases.  In 2006, the State’s existing Clean Energy Program budgeted $79 million for residential efficiency programs, while budgeting only $39 million for commercial and industrial projects.  Yet the 2006 Clean Energy Program Report showed that commercial and industrial programs reduced carbon emissions by 67,969 metric tons, compared to residential programs, which reduced them by only 19,032 metric tons.

For more information, contact Sara Bluhm at ext. 204.

The cost of State-imposed healthcare coverage mandates, one of the causes of soaring health insurance premiums, would get a thorough review under NJBIA-backed legislation that passed the Assembly March 13.

Under A-2255 (Greenwald, Conaway), the Mandated Health Benefits Advisory Commission would analyze the financial impact of all existing State-mandated health benefits.  Currently, the commission can only analyze the impact of mandates when they are proposed in the Legislature.

This would be the first comprehensive study on existing healthcare coverage mandates that have been driving up the cost of health insurance for New Jersey employers.  These mandates can add as much as 20 percent to the cost of health insurance, and any employer purchasing insurance in New Jersey’s regulated market has no choice but to pay for them.

The commission would review the impact of a mandate on total costs to health insurance purchasers and on patient utilization of related medical services.  NJBIA has long urged a review of existing healthcare mandates and supports the bill.  For more information, contact Christine Stearns at ext. 260.

The Senate Environment Committee on March 10 released a bill authorizing creation of local independent authorities that could charge what amounts to a tax on the rainwater that flows off driveways and parking lots.  NJBIA opposes the bill.

S-1166 (B. Smith) would raise funds for capital improvement projects to alleviate flooding and non-point-source pollution.  The bill would allow for the creation of local storm water utilities, which could charge fees based on a formula to be developed by the NJ Department of Environmental Protection.  The formula would most likely take into consideration average rainfall, potential impact to the environment, and the amount of impervious cover a property has, such as driveways or parking lots. 

Nominate your own company or another company

An opportunity for you and your company to be recognized for:
•   Motivating and Rewarding Your Employees
•   Creating Jobs
•   Protecting the Environment
•   Serving Your Community

All 23,000 NJBIA member companies are eligible for an Award for Excellence provided they are members in good standing.  The winners will be honored at NJBIA’s Awards for Excellence Dinner on November 5 at the Pines Manor in Edison, NJ.

The nomination deadline is Friday, May 9, 2008.

The Award Categories

•   Environmental Quality
Presented to companies that have done outstanding work to preserve or enhance the quality of the environment in New Jersey.

•   Job Creation
Presented to companies that have contributed to the State’s economic growth through the net creation of new jobs.

•   Outstanding Employer
Presented to companies that have demonstrated a creative and forward-looking approach to managing their human resources.

•   Public Service
Presented to companies for outstanding service to their communities.

All nominations must be completed and returned to NJBIA by Friday, May 9.  To obtain nomination forms, contact Stacy Wichner at 609-393-7707, ext. 213.

New Jersey’s poor tax climate is a major issue negatively impacting the decision of companies to invest, create jobs, and preserve jobs in the Garden State, according to a new study by NJBIA’s research affiliate, the New Jersey Policy Research Organization (NJPRO) Foundation.

The study, entitled “New Jersey’s Tax Climate – How Taxes are Affecting New Jersey’s Industrial, Commercial and Small Business Sectors,” presents a detailed look at the State’s struggling economic growth and how it is being affected by high taxes.

NJPRO reports that correcting a downward slide of private-sector jobs requires states to increase economic activity through the attraction of new businesses and preservation of existing businesses.

Companies tend to migrate to states that offer the greatest competitive advantage, and, all other factors being equal, they will usually choose to locate within states that offer more favorable tax systems.  Each state’s competitiveness in attracting new businesses and keeping existing businesses is often contingent on how its tax system is organized.  This report explains how New Jersey’s high taxes are a direct factor discouraging business investment and job creation in the State, and how high tax rates will continue to hurt the Garden State’s ability to compete for business with neighboring states.

In order to be more competitive on a national level, New Jersey must strive to create a tax system that does not inflict excessive taxes on business activity.  Reversing New Jersey’s economic slide from one of the most competitive states to one of the least competitive will require State policymakers to find ways to reduce business taxes.  Otherwise, the out-migration of businesses from New Jersey will grow.

Download the full study at NJPRO's Web site.

For more information on NJPRO, contact Sara Bluhm at ext. 204.

Q.  My energy costs keep rising.  I hear the BPU is going to raise my electricity rates again, is this true?  Is there anything I can do to help control my costs?

A.  More and more I hear from companies trying to find ways to cope with their electric bills.  Since 2003, utility electricity rates in New Jersey have risen each year.  For businesses with electricity demand of less than 1,000 kW, utility rates are now determined by an annual auction with full exposure to unpredictable global, political and economic factors.  This translates into price uncertainty.  The results of this year’s electricity auction, held in February, have significantly increased the cost of wholesale power for New Jersey utilities.  The new, higher electricity rates will take effect on June 1, 2008.

NJBIA, however, offers an alternative: the Power New Jersey program, a member benefit that is being managed by NJBIA and its preferred supplier, Constellation NewEnergy (CNE).  This program offers NJBIA members with electricity-supply bills of $3,000 or more long-term price stability and protection against fluctuating electricity prices.

Since its inception, Power New Jersey has enabled NJBIA members to contract directly with Constellation NewEnergy for their electricity supplies.  Over the last eight years, many members have entered into one-on-one agreements with CNE under a variety of contract term lengths and pricing arrangements.

Power New Jersey is now being expanded to allow members with electricity bills of $3,000 per month or more to combine their electric load with other NJBIA members into a purchasing pool.

Members will be offered a long-term fixed price that will allow them to control their electricity costs.  The program will enable members to:
• Leverage their buying power to obtain a fixed price for a specific term length,
• Obtain long-term electricity budget certainty and price stability,
• Access a seasoned price-risk manager to support their needs,
• Still enjoy distribution service from their utility, and
• Have the comfort of being served with an electricity supply agreement that has been reviewed and approved by NJBIA.

Additionally, NJBIA members whose ‘supply’ portion of their electric bills (for all of their electricity accounts) exceeds $40,000 per month, may contact Power New Jersey to discuss the option of an individual customized contract.

If this sounds like a program your company would be interested in, contact our team and let them know you are interested.  To get started, you may contact either Thomas Dickinson at 856-780-5296, or Stephanie Rios at 212-885-6439.  The deadline to join the first aggregation pool is April 25.

Please alert your management team to let them know that you are interested in participating.  Tell them that NJBIA has already done the legwork and negotiated a contract with Constellation NewEnergy, so your company does not have to worry about many of the details associated with third-party supply.

Constellation NewEnergy will need to be able to review your past electric history and will ask you to sign a release so they can access this data from your utility company.  Once it has been verified that you are eligible for the aggregation group, you will be given a contract to review.  There are no obligations at this point; your company can review it and walk away or accept it by the deadline. 

Control your company's electricity costs!  Join the Power New Jersey purchasing pool.  Visit www.njbia.org/electricity to get started.

FRIDAY, MAY 2
Developing Employee Handbooks & Policies
Properly written employee handbooks and policies are an essential tool for managing a productive workforce, but only if they are prepared the right way.  At this seminar, top New Jersey employment attorneys will explain what your company needs to do to bring your employment policies and handbooks in line with State and federal laws.  The seminar will be held at the Sheraton at Woodbridge Place in Iselin (Route 1 South), starting with registration and continental breakfast at 8:30 a.m.  It will end at 12:30 p.m.  The cost to attend is $119 per person for NJBIA members, $149 for nonmembers.  Register online now, or for more information contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves at ext. 219.

WEDNESDAY, MAY 21
NJBIA-Fidelity Investments Economic Forum
This Forum, Surviving the Slowdown: Managing Costs in Tough Times — Sizing Up New Jersey’s Economy, will bring together some of the State’s leading business executives to discuss proven cost-cutting strategies to lower your administrative, employee benefits, and personnel costs.  The keynote speaker will be Michael Santoli, Barron’s Associate Editor.  Co-hosted by Fidelity Investments, the Forum will be held at the Sheraton in Eatontown.  It will begin with registration and continental breakfast at 8:30 a.m. and end at 11:00 a.m.  The cost to attend is $69 per person for NJBIA members, $105 for nonmembers.  Register online now, or for more information, contact Stacy Wichner, 609-393-7707, ext. 213.

FRIDAY, JUNE 6
New Good Neighbor Awards Luncheon
Awards will be presented to New Jersey businesses that have recently built or renovated outstanding commercial facilities.  The reception will begin at 11:45 a.m., followed by the awards presentation from 12:30 p.m. to 2:00 p.m.  Network with New Jersey’s top builders, developers, architects and contractors!  This event will be held at the Sheraton at Woodbridge Place in Iselin.  Cost to attend is $70 per person.  Register online now, or for more information, contact Stacy Wichner at 609-393-7707, ext. 213.  To become a sponsor, contact Sherry Esteves, ext. 219.

MEET THE DECISION MAKERS SERIES 2008
Hear directly from the cabinet officials and legislative leaders who make decisions on issues like taxes, spending, healthcare reform, energy policy and fiscal restructuring.  NJBIA will bring together top Administration officials, along with legislative leaders, for insightful briefings on some of the biggest issues facing your business.  Each breakfast will run from 7:45 a.m. to 10:00 a.m. at Forsgate Country Club in Monroe Township (NJ Turnpike Exit 8A).  The cost is $69 per person for NJBIA members and $105 for nonmembers.  For more information, contact Stacy Wichner at 609-393-7707, ext. 213.

Tuesday, April 22:  Healthcare Reform
Find out how the State plans to reform New Jersey’s healthcare system from Heather Howard, the new Commissioner of the Department of Health and Senior Services, Senate Health Committee Chairman Joseph Vitale, Assembly Budget Committee Chairman Louis Greenwald, and other legislative leaders.

Friday, May 16:  Energy
Find out what the State plans to do about energy costs and the regulation of greenhouse gases from NJ Board of Public Utilities Commissioner Joseph Fiordaliso and members of the Senate and Assembly energy-related committees.

Friday, October 17:  Environmental Regulation
Meet NJ Department of Environmental Protection Commissioner Lisa Jackson and members of the Senate and Assembly Environment Committees, who will discuss State environmental policy and its impact on your business.