How bad is New Jersey's budget picture next year? "Unprecedented," says Ed McBride, Governor Jon Corzine’s chief of staff. "Absolutely brutal," according to Bill Castner, the Governor's chief counsel. "It's not a pretty picture," added Michellene Davis, Corzine’s chief policy counsel. The three top advisors to Corzine gave their grim assessment of the budget to 150 NJBIA members on February 27 at the first of NJBIA’s Meet the Decision Makers events. The three key staff members spoke and fielded questions from the audience for more than an hour, most of which centered around balancing a budget in the face of an estimated 10 percent reduction in revenues.

"We've never seen anything like this where every revenue category is down significantly," McBride said. The administration predicts revenues will be $28.5 billion for fiscal year 2010, which begins July 1, 2009. That’s essentially the same revenue estimate for the State budget four years ago. By comparison, the current year budget is $32.9 billion. While all budget options are "on the table," Castner said that Corzine had a solid record of fiscal restraint and that it would be spending cuts, not tax increases, which would receive the most attention. "(Corzine) views tax increases as a last resort," Castner said. "We're looking at cost cutting, so if you have any ideas, we’re all ears."

The administration is counting on funding from the federal stimulus bill signed into law February 17 to fill in some of the gap. From a budget standpoint, McBride said the two most important components of the federal stimulus bill are increased Medicaid funding, which allows the State to reduce its Medicaid appropriation, and the stabilization aid designed to support the budget.

Meanwhile, Davis said she would continue to look for ways to stimulate growth in New Jersey’s private sector because the Governor’s top priority continues to be the economy. "We will continue to push that priority... to ensure proliferation, not just survival, of our business community," Davis said.

Bill Funding Private-Sector Energy Projects Sent to Governor

The Assembly on March 5 gave final legislative approval to a bill that provides $105 million to businesses for energy conservation and on-site generation. S-1932 (Ruiz, Gordon)/A-2507 (Chivukula) would fund grants from the NJ Board of Public Utilities (BPU) by tapping revenues from the "retail adder," an existing tax on large, hourly priced electric bills. NJBIA supports the bill. The bill would allocate $60 million for the development of on-site energy generation, known as combined-heat-and-power projects. It would allocate $45 million for energy efficiency projects at businesses.

NJBIA believes that financial incentives for energy conservation projects have been unfairly distributed. The Retail Adder Fund is supported solely by commercial and industrial ratepayers. With an anticipated $11 return on every dollar invested in commercial and industrial projects, this money would help the State better meet its energy conservation goals and utilize funds rightfully belonging to ratepayers who pay the taxes that support the fund. For more information, contact Sara Bluhm.

NJ Lost 88,700 Private-Sector Jobs in 2008

A deepening recession has accelerated New Jersey's job losses, with the State shedding 48,400 private sector jobs in the last quarter of 2008, and another 9,300 in January of this year, according to a report issued on March 4 by the NJ Department of Labor & Workforce Development.

In its annual revision of State employment data, the Department released new figures showing that New Jersey lost a total of 88,700 private-sector jobs in 2008, a 2.6 percent decline. The revised number is nearly 50 percent higher than the original estimate of 59,800. It is also the biggest one-year loss since 1990. Most of the 2008 employment loss came in the final three months of the year. The State lost an average of more than 16,100 jobs per month in October, November and December, compared with an average of less than 4,500 in each of the preceding nine months.

The recession cut a large swath across all three major economic sectors. The services sector, which includes everything from retail stores to banks and technology, lost 54,100 jobs (-1.8 percent). Manufacturing lost 20,000 jobs (-6.5 percent) and residential and commercial construction lost 14,600 jobs (-8.5 percent). The only gains were seen in two service sub sectors: leisure and hospitality (mostly restaurants, hotels and the like) grew by 2,100 jobs, and education and health managed a healthy gain of 15,500 jobs. Government jobs grew by 3,000. As employers struggle to cope with the recession, New Jersey's unemployment rate has increased to 7.3 percent, up from 4.6 percent one year ago but still below the national unemployment rate of 7.6 percent in January.

New Final Regulations Issued! How to Comply with the New Paid Family Leave Law Wednesday, March 18

The State has issued new, final regulations for implementing the Paid Family Leave Act, which mandates that all NJ employers must provide six weeks of paid family leave to eligible employees starting July 1.

To help your company implement strategies for complying with the new law, NJBIA is hosting Navigating New Jersey Paid Family Leave on March 18 at the Sheraton in Eatontown (Exit 105, Garden State Parkway). Hear directly from top legal experts who will provide you with details on how the law will impact your workplace and how it will work with existing State and federal unpaid leave laws. Learn how to protect yourself and your business!

The seminar will begin at 8:30 a.m. and run until 1:00 p.m. The cost is $129 per person for NJBIA members and $169 for nonmembers. Register online now, or contact Katie Wittkamp at 609-393-7707, ext. 239, for more information. To become a sponsor, contact Sherry Esteves at ext. 219.

Meet State Treasurer, Budget Committee Chairs at Meet the Decision Makers, Tuesday, March 24

Get the inside story on the State budget at NJBIA's Meet the Decision Makers: Taxes and Spending on Tuesday, March 24, Forsgate Country Club, Monroe Township (Exit 8A, NJ Turnpike). Hear about State taxes and spending from New Jersey's State Treasurer, David Rousseau, Assembly Budget Committee Chair Louis Greenwald, Senate Budget Committee Chair Barbara Buono, and other committee members. The event will begin with registration and breakfast at 7:45 a.m. and ends at 10:00 a.m. The cost to attend is $75 per person for NJBIA members and $125 for nonmembers. Register online now, or contact Stacy Wichner at 609-393-7707, ext. 213, for more information. Call Sherry Esteves at ext. 219 to become a high visibility sponsor.