Nearly 300 people, including 23 legislators,
attended briefing breakfasts in Mount Laurel, Tinton
Falls, Parsippany, Monroe Township and East Rutherford.
“If you were to take all of the issues that are
important to our members—the things they complain
most about and the things that NJBIA spends most of
its time working on—you could group them under
one big heading: the high cost of doing business in
New Jersey when compared with other states,” said
NJBIA Senior Vice President Melanie Willoughby, a breakfast
speaker. The high cost of doing business was the program’s
theme. As Willoughby pointed out, New Jersey has the
highest health insurance costs in the nation (according
to the Mercer Report); the most unfair tax environment
(according to CFO Magazine); and the highest air and
water permit fees (according to data from the NJ Department
of Environmental Protection).
What’s more, these high costs are having a negative
impact on employment. According to the US Department
of Labor, New Jersey ranked 41st in the nation in the
rate of private-sector job growth in 2004, behind New
York and Pennsylvania.
Part of the problem is government spending, which has
grown dramatically in recent years and created huge
deficits that have had to be closed, usually at the
expense of the business community. Fast-rising government
spending caused business taxes to double in recent years.
That’s why the business community has been supportive
of Governor Richard Codey’s proposed budget, which
would actually cut spending by $600 million from last
year.
One of the biggest costs of doing business is health
insurance. NJBIA’s 2005 Health Benefits Survey
shows employers’ insurance costs rising at a double-digit
rate for the third year in a row. Also, for the first
time in the survey’s 12-year history, significant
numbers of employers were forced to drop coverage. While
90 percent of survey participants still provide health
benefits to their employees, this is down from 94 percent
in the previous survey. This is an ominous sign, since
5 million New Jersey residents receive their health
benefits from private sector employers.
NJBIA has proposed a comprehensive health insurance
reform plan designed to offer small businesses more
affordable choices, permit health savings accounts,
provide tax incentives to employers who do provide health
benefits, and curb legislatively imposed health coverage
mandates. A recent example of such a mandate is the
proposed vast expansion of mental health coverage. (See
related story on page 2.)
NJBIA Vice President John Rogers touched on other legislative
proposals that would also increase business costs, such
as a bill that would create a property tax convention.
This would almost certainly lead to higher business
taxes, as convention delegates could only consider tax
changes, not government spending. A likely convention
outcome is that some of the property tax burden would
be shifted onto other taxes, such as business taxes.
Rogers also pointed to new lobbying regulations that
would turn thousands of business owners and their employees
into lobbyists for routine activities like getting an
environmental permit, bidding on a government contract
or even sitting on a government advisory panel. Many
employees involved in such activities could be required
to register as lobbyists. Employers would have to pay
a $425 annual registration fee for each employee.
NJBIA also opposes the proposed diversion of $250 million
from the Unemployment Insurance Trust Fund. The amount
of money in the fund has dropped from a high of $3.1
billion to about $900 million. If the fund cannot meet
its unemployment insurance obligations, employers could
face higher payroll taxes.
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