NJ Business Matters: The Blog of the CIANJ

They Call This Push Back

There are lots of things that can keep you up at night - a possible recession, providing for a family, what Cowboy fans are going to do with their TO jerseys - and anti-nuclear activists are trying to add something else to the list.

As they shift from one reason to the next as to why reactors in America should be shut down, Jack Spencer of the Heritage Foundation, takes them to task in today's Washington Post. Nuclear power produces virtually zero greenhouse gas emissions, and is the only source of energy we have that can make such a claim while producing electricity on a large scale.

While some environmentalists choose to brush that aside as a detail, others now elevate the issues of safety and security. While safety should be paramount, here are a few inconvenient truths about the history of nuclear energy,

The unfortunate thing is that there are great, newsworthy stories to be written about nuclear power: No one has ever died as a result of commercial nuclear power in the U.S.; terrorists have never attacked a nuclear power plant; nuclear power is clean, affordable and emits nothing into the atmosphere. The list goes on.

Our foreign competitors were turning to nuclear power long before global warming became political topic numero uno. Meanwhile, the United States has not had a new generator come online in a generation. New Jersey already has 51.8% of its electricity generated by nuclear power, and it's time to relicense Oyster Creek and to let the industry grow.

Paid Leave Mandate Moves Forward

Thank you to the following Senators, who yesterday voted against imposing a paid leave mandate on virtually every employer in the State of New Jersey:

Senator Anthony Bucco, Senator Phil Haines, Senator Leonard Lance, Senator Kevin O'Toole, Senator Steven Oroho and Senator Shirley Turner

Unfortunately, despite the votes of the six Senators, the bill passed the Senate Budget and Appropriations Committee.

As you know, S-786 would make NJ the second state in the nation with a paid leave mandate on all employers. You also know that some small employers cannot operate with key personnel missing for six weeks, and that the law will create a logistical nightmare as it interacts with FMLA, NJ FLA and other state programs such as unemployment. A single solution forced on all companies will be unworkable for some.

While Congress is debating an economic stimulus package to jump-start the American economy during an economically slow time, New Jersey (already expected to have a shrinking population and already one of the harshest tax and regulatory environments in United States) is moving toward putting a burden on companies unique to the state.

The following Senators chose to vote yes on the bill and for paid leave,

Senator Barbara Buono, Senator Paul Sarlo, Senator Sandra Cunningham, Senator Dana Redd, Senator Teresa Ruiz, Senator Brian Stack, Senator Steven Sweeney, Senator Joseph Vitale

That's an 8-6 vote. Had any one of the eight Senators listed above voted differently, the bill would not have advanced.

Every vote counts, indeed.

Buying the Enviros Line on Oyster Creek

On Sunday, the Star-Ledger ran a story on the relicensing process of the Oyster Creek Generating Station. The plant powers 600,000 homes and, because it is a nuclear facility, does so virtually emissions free.

Some environmentalists oppose the relicensing (which must occur by 2009), and have made their case to federal panels in the hopes of shutting the plant down. In previous posts, we've detailed those claims, and the government's decision that the containment system is safe to operate another twenty years.

The Ledger story notes,

Opponents' arguments about the safety of the containment shell were persuasive enough to win the first-ever public hearing by the agency's licensing board, which in the end signed off on the safety of the plant. (emphasis ours)

"I fully expect them to relicense the plant. We've always suspected the NRC was a rubber stamp for the industry," said Janet Tauro, a mother of two teenagers in Brick Township who is a co-founder of one of the groups trying to shut the plant, Grandmothers, Mothers and More for Energy Safety.

To attack the panel as a rubber stamp isn't a surprising position for plant opponents to take. Unfortunately, the paper makes the situation worse by mischaracterizing NJACRE.

Oyster Creek, which sits off Route 9 south, just west of Barnegat Bay, is not without its advocates, who say the station is crucial to meeting the state's growing energy demand. Closure of the facility, they argue, would result in importing more expensive and dirty power from out-of-state fossil fuel plants.

"The costs would go up," said Rick Mroz, a former counsel to Gov. Christie Whitman and a member of the Affordable, Clean, Reliable Energy Coalition, a business group backing the plant. "It would mean importing more costly electricity from power plants in the Midwest."

Just so we're clear, here's a list of non-businesses or business groups involved in NJACRE,

African American Environmentalist Association
Fish Hawks
NJ International Brotherhood of Electrical Workers (NJ IBEW and LU 1289)
International Union of Painters & Allied Trades
Plumbers and Pipefitters (Union Local 322 and Local 9)

The truth is that NJACRE is a coalition of individuals, companies and organizations that are dedicated to meeting NJ's increasing energy needs through clean generating methods, which includes nuclear power. It's bad enough that nuclear opponents paint the populist image of a government panel as a rubber stamp for business interests, it is worse for the state's paper of record fails to acknowledge the breadth of support for nuclear energy and for Oyster Creek.

Malpractice Reforms Bring Balance to Healthcare System...In Ohio

Ohio's medical community is beginning to reap the benefits of tort reform legislation passed five years ago and is now seeing a reduction in the number of malpractice claims filed. From the Associated Press,

A new report says the number of medical malpractice claims in Ohio dropped 20 percent from 2005 to 2006.

The report released Tuesday by the Ohio Department of Insurance says there were 4,006 medical malpractice claims reported for 2006, compared with 5,051 for 2005.

The department attributed the drop to changes made by lawmakers five years ago as they tried to deal with growing concern about the number of claims and the size of jury verdicts.

Some of those changes included caps on the amount of money injured patients could receive for pain-and-suffering, and attempts to restrict so-called frivolous lawsuits against doctors.

It is working in Ohio and CIANJ is proud to work with its coalition partners to bring similar results to New Jersey. Fewer frivolous claims lowers insurance premiums, which means greater access to care.

Gov. Seeks To Borrow Another $2.5 Billion For School Construction

Quick, you're a homeowner and you are under the burden of such crushing credit card debt that you plan to sell the family car, what do you do? Most of us would start by cutting up their credit cards. If you're the State of New Jersey...

In a last-minute bid to head off Supreme Court action, the Corzine administration announced yesterday it would ask lawmakers for at least another $2.5 billion to restart the troubled school-construction program in the state's poorest districts.

The plan to borrow another massive infusion of cash follows controversy about how the initial $6 billion was spent and comes just weeks after Corzine lectured lawmakers in his State of the State address on New Jersey's burgeoning debt.

All two of you regular blog readers know that on January 8 the Governor said our state was in such poor fiscal shape that we must exchange toll revenue for the next 75 years for upfront cash. Then, to be sure that investors who give us that cash are paid back, we must increase tolls 800% on New Jerseyans.

Remember that the first $6 billion spent by the School Construction Corporation (a government entity)failed to build half of the schools it was assigned to and that they spent an average of 45% more on school construction than the going rate. Now taxpayers are supposed to shrug this off and give a new government entity $2.5 billion because,

"We knew this was looming, and, frankly, if the governor didn't do something, the court would," Senate President Richard Codey said.

Checks. Balances. Scapegoats. 

Doing Less with More

The Sports and Exposition Authority, despite having less responsibility, has gone ahead and increased its staff costs by 20% for next year. Cheers to the Star-Ledger today for throwing the red flag and calling for review.

Remember that the NJSEA, which operates the Meadowlands, is in the midst of an exodus of its sports teams. The Devils have left for their own facility in Newark and taken Seton Hall basketball with them (Go Pirates!), the Nets plan to move to Brooklyn and the Giants and Jets will operate their own stadium once its construction is complete. That leaves the NJSEA with the racetrack, collecting rent from Xanadu and trying to book entertainment.

As the authority's revenue decreases but its administrative expenses increase, it won't be long before agency executives again go hat in hand to Trenton asking for a bailout.

To avoid that, the authority must take another look at its budget proposal and, like all other government agencies, search for savings. At a time when Corzine is urging the state to go $38 billion more in debt to help put it on a firmer fiscal footing, the authority's plan to pile on expenses doesn't make sense.

If government is going to come to taxpayers looking for a $38 billion bailout in the form of tolls eight times higher than they are today, then state agencies should be doing everything within their power to cut expenses. After all, if an agency like NJSEA can spend more with less revenue and then go to Trenton for taxpayer-funded assistance (as they did to the tune of $15 million in 2000), what's to prevent a PBC from doing the same?

Paid Leave Bill Back Before the Legislature; Questions Still Unanswered

We are two weeks into the new legislative session and Senator Steve Sweeney has re-introduced the paid family leave program we have discussed at great length here at NJ Business Matters. The most notable change from last year's bill is a reduction in leave time from the original 12-week plan down to six. California is the only state with an equivalent program, which the Golden State offers for six weeks.

The draft legislation is available here. It still does not offer the exemption for small businesses that federal law does and still leaves unanswered questions regarding interaction with existing NJ laws.

For example, if an employee at a small company is not offered job protection and takes the leave anyway, have they quit or have they been laid off? This has significant implications regarding the state's unemployment benefits. Also, if a company offers job protection to one employee and not another, are they in violation of the state's Law Against Discrimination? You get the idea.

The legislation would place a burden unique to companies in New Jersey and leave small businesses open to potential lawsuits, while forcing them to miss key personnel for extended periods. It's one heckuva strategy for getting us out from under the economic predictions put forth by Rutgers economist in which,

Nancy Mantell, director of the Rutgers Economic Advisory Service, is forecasting a 2.2 percent rate of annual state output growth between 2006 and 2017, slightly below her nationwide forecast of 2.5 percent in annual gross domestic product expansion.

"This differential is due to the relatively higher cost of living and doing business in New Jersey, as well as our lower rate of population growth, expected to average 0.6 percent," Mantell said....

She predicted the state's unemployment rate will be 5 percent in 2008, and will average 5.2 percent through 2017.

Mixed News In December Job Numbers

New Jersey's Department of Labor and Workforce Development has released its preliminary job numbers, offering a mixed bag to those of you with an interest in NJ's economy - which is everyone.

The good news:

• 3,700 new jobs were added during December (a modest gain), and 3,500 of those were in the private sector. For too long our government has been adding jobs at too fast a rate, helping lead to the unsustainable growth in our budget. A ratio north of 17:1 between the private and public sector is a great improvement.
• More New Jerseyans than ever are employed. The new record stands at 4,114,900.
• The state's unemployment rate remains one-half percent below the national average.

The bad news:

• While still below the national average, New Jersey's unemployment rate climbed from 4.2% in November to 4.5% in December.
• From December 2006 through December 2007, New Jersey added less than 30,000 jobs. The go-go years of the 1990's added 70,000 jobs a year.

The raw data is available online. Job gains were led by education and health services, leasiure and hospitality, and professional/business services. The economy lost the most jobs in construction, financial activities and manufacturing.

The Gov. Comes to Bergen County

As many of you know, the Governor is in the midst of touring each county to discuss his asset monetization program. The Record has placed video of the Bergen County stop on a continuious loop.

To hear the Governor's case as to why state roads should be turned over to an independent PBC, and why a 22.9 mile drive on the Turnpike will eventually cost $12.50 (each way), see the video below.

Closing Shop

In the past five weeks, NJ Business Matters has added many new readers who have been following our coverage of the Lame Duck Session.

As of today, the session is officially over, as Governor Corzine has either signed, vetoed, or pocket vetoed all remaining bills. Therefore, we will stop posting under Lame Duck Watch, but don't fret.

While many of you have been going directly to http://www.njbusinessmatters.org/lame_duck_watch/index.html, you have actually been visiting a subsection of our overall blog and missing out on some of the great prose we've been writing about all legislative topics in Jersey.

So here's a quick post reminding you to point your browsers to http://www.njbusinessmatters.org. The first year of this blog has been a tremendous success, and we look forward to continuing the conversation with you over on the main page.

Perfectly Imperfect; And That's OK

The Governor yesterday acknowledged there are "technical concerns" with the electronic waste bill we've made famous here at NJ Business Matters. He also noted that he would have preferred to conditionally veto the bill, had that option been available. After such a ringing endorsement, he signed the bill into law, stating.

In signing this bill, I am cognizant of its impact on a variety of manufacturers, both situated in New Jersey and located elsewhere. It is my understanding and expectation that technical concerns with this legislation, which I would have addressed through a conditional veto had that option been available, will be addressed in the coming session.

It's a good thing airplane manufacturers don't use the same logic. As we have asserted on the blog and in a memo to the Governor's office and the Senate, the bill as presently crafted risks putting companies with a New Jersey or US presence at a competitive disadvantage.

We are heartened that the Governor has asked the DEP to work with legislators in fixing the bill's technical concerns. Unfortunately, as the Assembly Democrats news release points out, "This law takes effect immediately."

Wrongful Death Bill (Pocket) Vetoed

The Governor's Office just issued a press statement announcing he has "pocket vetoed" the trial-lawyer supported expansion of New Jersey's Wrongful Death Act. We'll spare you the repetition of the reasons we opposed to the bill, such as higher insurance premiums, (sorry, couldn't help myself), but see previous posts here and here.

The Governor did not veto the legislation, he simply refused to sign it by today's noon deadline. The net result is the same: the bill will not become a law. In his statement, Governor Corzine noted about S-176,

Unfortunately, I do not believe that this bill in its current form strikes a fair balance that would avoid using a strict monetary valuation of a person’s life while also addressing the adverse effect of allowing unlimited and unpredictable damages.

Thanks are in order for the Governor, who recognized flaws in the bill and took appropriate action.

Update: Star-Ledger coverage is now available complete with a quote from CIANJ President John Galandak. Our press release on the issue is available here.

Congratulations Assemblyman Schaer

Congratulations to Assemblyman Gary Schaer, who was recently named the Vice Chair of the Assembly Budget Committee. Assemblyman Schaer, who earned the endorsement of PENPAC in his 2007 re-election campaign, is a Democrat and represents parts of Passaic, Essex and Bergen Counties.

From his press statement,

“At a time when New Jersey needs to tighten its belt, Assemblyman Schaer will make sure we put forward a budget that puts people first.” said Assembly Speaker Joseph Roberts

The Assembly Budget Committee reviews the Governor’s proposed budget plan and crafts the Legislature’s appropriations bill, the state’s annual fiscal spending law.

“It’s a privilege to be named for such an important and prestigious committee leadership post,” said Schaer. “There is a need like never before to do more with less so we provide quality service while shielding taxpayer money from waste, fraud, and abuse.”

Schaer, 56, has more than two decades of experience in the financial services industry and has a clear record as a fiscal conservative.

Those statements offer a hopeful beginning to his term.

Democracy Is Not A Spectator Sport: Voter Registration Deadline Today

Today is the final day to register to vote in New Jersey's February 5th Presidential Primary. If you are not yet registered to vote print the voter registration application from the Division of Elections website, complete it and mail it today. No postage is required.

To be eligible, you must be 18 years old and a resident of your county for 30 days. In New Jersey, only registered Democrats may vote in the Democratic primary and only registered Republicans may vote in the Republican primary. If you are unaffiliated, you may declare yourself a member of a party the day of the primary, but you must be registered to vote as of today.

Haste Makes Electronic Waste 2.0

It's 8:36 a.m. and Governor Corzine still has not announced the signing of the electronic waste bill, the troubles of which are detailed in a previous post.

In short, CIANJ agrees with the concept of developing a program to recycle electronic waste. The debate surrounds who should pay for it. We supported a program whereby computer manufacturers would pay the Department of Environmental Protection a $5,000 registration fee and then either let the DEP run the program (and charge manufacturers their "fair share" of the cost) or allow manufacturers to recycle their own products (with DEP approval). Television recycling would be paid via a $10 point of sale fee.

The reason for the different methods is differences in industries. Some television manufacturers have no manufacturing or corporate presence in New Jersey or the United States. The DEP's ability to bill those overseas companies for a NJ recycling program is minimal...at best. That means companies that create jobs in the United States would be forced to shoulder more of the burden.

That compromise was jettisoned during the final hours of the legislative session.

Just so we're clear, it is the environmentalist movement that has adopted the absolutist position while the industry was willing to compromise. Because of that and inadequate protections for NJ manufacturers, CIANJ has withdrawn its support for the bill and called on the Governor not to sign it.

The Governor has until noon today to either sign or veto all legislation remaining from 2007. If he does neither, they still fail to become law based on a "pocket veto".

Wrongful Death Bill Still Sits on Gov's Desk; Trial Attorneys Fret

The Governor signed more than eighty pieces of legislation into law over the weekend, and nowhere on that list is the trial-lawyer supported expansion of the state's Wrongful Death Act. Any legislation not signed by noon tomorrow fails to become law.

The Association of Trial Lawyers of America (whose national organization recently decided to remove the words "trial lawyers" from their title, going instead with the PR friendly and superhero-like "American Association for Justice") staged a press conference this afternoon seeking the governor's signature.

Regular blog readers know this all by heart. Allowing for unlimited damages to be collected for emotional grief is going to drive insurance premiums higher because insurance companies will be forced to protect themselves from unlimited suit. That protection will most likely come from increasing cash reserves.

The bill (S-176) would also make NJ a destination for trial attorneys because we would be one of only eight states with such a system. 

Click here to check out CIANJ's Business Beat regarding the issue and here to e-mail the governor and express your concerns.

Question and Answer

During his State of the State Address at which the governor unveiled his asset monetization debt reduction plan, he challenged opponents to propose better alternatives. Yesterday, Star-Ledger columnist Paul Mulshine tried to do just that. Mulshine sketches out a program that reduces old debt without acquiring new debt and jettisons the business as usual model that has taken hold in Trenton. Click here to read his entire column, and here's a little teaser,

[T]he so-called "structural deficit" in the state budget. And that brings up a question: Why am I even discussing this in a column about toll roads? It's those pigs again. If they could only keep their snouts out of the Trenton trough, there would be no deficit. But the pols have awarded themselves and their employees retirement packages far more generous than in private industry. The rising cost of these benefits creates a recurring deficit of $2.5 billion to $3 billion a year.

You know, benefits such as free health insurance for life and defined benefits packages that the private sector has found to be unsustainable. The state has found them to be unsustainable as well, but they just haven't done anything about it because taxpayers have been there to foot the bill.

Which is why so many New Jerseyans have concerns over the monetization plan. Under Governor McGreevey a huge settlement received by the state via tobacco settlements was squandered in two years when it was originally slated as 25 year payout. Under Governor Whitman, the state borrowed money without voter approval in clear violation of at least the spirit of the state's constitution.

If those mistakes have been made in the past, why should voters trust future governors and legislatures to not make them in the future? Only this time we'd have to dig ourselves out with much less revenue as the tolls would have been bonded for twenty years. Trenton is out of "trust me's"

Star Ledger Urges Gov. To Reject Wrongful Death Bill

A bill expanding New Jersey's Wrongful Death Act sits on the Governor's desk and the Star-Ledger has now joined with the business community's position urging Governor Corzine not to sign it.

The bill would allow families of wrongful death victims to collect unlimited damages for emotional grief. Current law already allows damages for economic loss, including the loss of household services, counseling and advice. CIANJ has objected to the bill since its introduction on two grounds.

1. It will lead to higher medical malpractice and other insurance premiums. If insurance companies must protect themselves from a suit for an unlimited amount of money, they will need to increase their reserves to compensate. That means higher insurance and healthcare costs for us.
2. It will make NJ a destination state for plaintiff attorneys. The state's plaintiff-friendly system has already caused class action asbestos and pharmaceutical suits to be filed here. Out of state victims and their attorneys should not clog the courts while New Jerseyans with legitimate claims wait. Presently, only eight states allow for unlimited damages to be collected for Wrongful Death.

The Star-Ledger succinctly puts it,

Most states either don't allow compensation for emotional distress in wrongful death cases or cap the amount a family can receive. The New Jersey statute would allow unlimited compensation. That doesn't make sense.

Without a cap, the ability of insurance companies, hospitals and other employers to predict liability becomes more difficult, further hurting New Jersey's already shaky business climate. A cap between $250,000 to $500,000 at least would allow business some yardstick to anticipate litigation expenses.

Money cannot replace a loved one. Yet it is the way courts punish wrongdoing and provides a measure of compen sation to a family that has suf fered a tremendous loss. It is not and should not be akin to winning the lottery.

Coincidentally, S-176 was the lead story in CIANJ's e-newsletter. To read the Business Beat and contact the governor voicing your concerns, click here.

SRA Survives Another Day

Yesterday the State Board of Education chose to reform, rather than eliminate the Special Review Assessment (SRA) for NJ's high school students.

In order to graduate from a New Jersey high school, a student is required to pass the High School Proficiency Assessment (HSPA), which tests 8th-grade level skills. If a student fails to pass either section of the HSPA three times, the SRA exists as an alternate route.

The problems with the SRA are numerous. For example, it is a subjective test and the scoring is done by the student's home district - which has a vested interest in having their students graduate. Fortunately, the board decided yesterday to do away with that policy.

Last year the number of students who needed the SRA in order to graduate was about 12% of all high school seniors. Remember, the test they were unable to pass is designed at an 8th grade level. In some of the state's poorest performing districts, about half of high school graduates earned their diploma via the SRA.

Schools and educators had voiced concern, however, about eliminating the SRA, saying it would be unfair to students who had otherwise met all graduation requirements.

Which begs the question of accountability. Yes, on paper the high school senior may have met all requirements. However, how were they advanced from the 9th to the 10th to the 11th to the 12th grade without the ability to pass a test of 8th grade skills?

The SRA was designed as a sensible response to a small segment of students who may have "froze" when taking the standard test. However, it has become a crutch for poor performing districts and goes to the heart of the education question for employers.

What does a New Jersey high school diploma mean?

Watch Out for Flying Pigs

Jersey papers are abuzz this morning after more details of the Governor Corzine's asset monetization plan were unveiled during yesterday's State of the State Address. Here's the abridged version of what has been unveiled so far:

1. The state would form a "public benefit corporation" (PBC), which would have the bonding ability of a private sector company but the tax exempt status of a non-profit of government entity.
2. That PBC would take control of the Turnpike, Parkway and Atlantic City Expressway plus make Route 440 a toll road. The PBC would then borrow up to $40 billion, and use that money to pay down the state debt and fund road improvements.
3. The PBC's new $40 billion debt would be paid through toll increases, whereby tolls would increase 50% plus the rate of inflation every four years starting in 2010.

We know you've heard this before, but attached to this would be tax freezes and budget cuts to help ensure the spending spree which created the old debt wouldn't thwart efforts to pay down the new debt.

Here's the instant-analysis from your trusty blogger.

• There are benefits to financing road improvements under such a scheme. For example, the price of asphalt is increasing rapidly. Paying for it at today's prices rather than tomorrow's could save the taxpayers money.
• We are heartened to see promises of budget cuts and tax freezes, but we've seen this movie before.
• The toll increases are steep, and barriers to the free flow of people and goods throughout the state is of great concern.
• The plan uses new debt to pay down old debt.
• The government spent its way into a massive financial hole. Now they're asking taxpayers (many of whom resisted the initial funding) to bail them out.

There are obviously numerous questions which need to be answered - starting with who would appoint the governing board of the PBC.

Both you regular blog readers know that CIANJ's position on asset monetization for more than a year has been that such a plan does not inherently fly in the face of free enterprise principles and could benefit the taxpayers. Unfortunately, what we got yesterday was less than what we hoped for.

The Governor plans to visit all 21 counties and speak to citizens promoting his agenda.   

Just In Case You Have An Hour

Two audio files below for your listening pleasure. The first is Governor Corzine's State of the State Address. The text of the speech is available here.

First out of the gate with his response is Steve Lonegan, Executive Director of the New Jersey Chapter of Americans for Prosperity.

The Last Waddlers

Today is reorganization day in Trenton. Everyone who won election in November is sworn in, the Governor greets them with his State of the State Address (much more on that later) and the slate of posted bills is wiped clean. It has all the chaos of a high school graduation with almost the same level of excitement.

The boss and I will be in Trenton congratulating everyone and wishing them well. Before we can fully turn attention toward what's ahead in 2008, here's a recap of what happened in the previous legislature's final hours - which ended late last night.

S-2491/A-3938 broadens the state's Urban Enterprise Zone program for small businesses. As you know, UEZs try to generate economic growth by offering 50% off the state sales tax within the UEZ. However, businesses actually pay the full tax and then apply for a rebate. The paperwork of managing so many (often times low-dollar amount) sales has lessened the program's effectiveness. This legislation would change that and allow the rebate to take place at the point-of-sale. CIANJ Position: Support
Status: Passed Both Houses

S-80 expands the state's Business Retention and Relocation Assistance Grants (BRRAG) to benefit smaller companies. Presently, grants are open to companies that expand within or relocate to New Jersey and will create at least 250 jobs. BRRAG grants offer tax credits up to $1,500 per job created. S-80 would make more companies eligible by lowering the threshold to 50 jobs created for eligibility. CIANJ Position: Support
Status: Passed Both Houses

S-176 would fundamentally alter NJ's Wrongful Death Act by allowing victims' families to sue for unlimited damages for emotional grief. The present system allows suit to be brought for financial loss (including damages such as the loss of parental guidance, household services etc.), but not for emotional pain and suffering. Only six states allow for such suits, and S-176 would make NJ a destination for trial lawyers while driving insurance premiums higher as companies must protect themselves from lawsuits with no dollar limit by increasing reserves. CIANJ Position: Oppose
Status: Passed Both Houses

S-3043 would provide tax incentives up to $75 million for a company choosing to locate around NJ's mass transit hubs. To be eligible for the tax credit, a company would need to invest at least $75 million in capital and create at least 250 jobs within a half-mile of transit stations in eight NJ cities. CIANJ Position: Support
Status: Passed Both Houses

S-554 would create an electronic waste recycling program. We've dedicated a whole post to this just below. In short, CIANJ was willing to support a compromise version of the bill. Unfortunately, that compromise was jettisoned on Thursday and CIANJ has withdrawn its support.
Status: Passed Both Houses

Haste Makes Electronic Waste

The final legislative day may offer all New Jerseyans insight as to what can go wrong when the legislature works in haste. Today's example: a proposed electronic waste recycling program.

CIANJ does not oppose the creation of an e-waste program. However, legislators may choose to jettison an industry-supported compromise and place NJ and US-based facilities at a disadvantage to their overseas competitors.

The debate that surrounding the e-waste program is whether NJ should follow a “producer pays” model or one funded by a point-of-sale Advanced Recovery Fee (ARF). In a "producer pays" system, a manufacturer would pay the NJ Department of Environmental Protraction a $5,000 registration fee and then either develop its own recycling program or pay its "fair share" of what it costs to operate a state-administered one. An ARF model requires consumers to pay $10 at the point of sale to fund a state-run recycling program.

In general, computer manufacturers support a producer pays system, largely because of what can be salvaged from old computer parts. TV manufactuers prefer a producer pays model because of the number of TV companies that come into and go out of existence and the difficulty of enforcing registration fees and 'fair share' costs to a facility not based in the US. So, a CIANJ supported compromise did just that - it allowed computer companies to pay a $5k registration fee and recycle their own products, while consumers would fund a TV recycling program.

Last-minute amendments to the legislation have now eliminated that compromise, bringing television manufacturers into a producer-pays model. CIANJ has several specific objections to the substitute of S-554/A-3572, which we believe was hastily developed and would place additional costs on products created in the United States. The industry employs 30,000 New Jerseyans whose jobs would be impacted by an improper implementation of this program.

The last minute changes are largely unenforceable on foreign television manufacturers, placing those that produce their products in the US at a competitive disadvantage. CIANJ believes that the substitutes for S-554/A-3572:

• Place a burden on companies that produce their products in New Jersey and the United States. Companies, especially those that manufacture their products overseas, which dissolve with the end of peak retail cycles, will not face the same recycling program costs, giving their products an edge over those made at stable US-based facilities.
• Create a competitive advantage for companies not located within New Jersey. As presently written, companies may develop and participate in their own recycling programs, provided they are approved of by the DEP. However, because they would be based on return share and not market share, companies with no presence in New Jersey may be exempt from such requirements.
• Create an easily-diverted legislative fund, making it possible the e-recycling program will never be fully fulfilled. Section 5 mandates registration fees be paid by each manufacturer into a fund, which the legislature would then appropriate. However, ambiguous language in the bill creates a scenario whereby the funds might never go toward their intended purpose.

Because of all the confusion created by the changes made on Thursday, CIANJ has withdrawn its support for the legislation and is urging legislators to consider a new version of the bill in the next legislative session - which begins tomorrow.

Oyster Creek Closer To Being Relicensed

The Department of Environmental Protection has agreed that (CIANJ Member) Exelon's coastal management plan for the Oyster Creek nuclear power reactor was consistent with the state plan. The importance of the ruling is that it now allows the Nuclear Regulatory Commission (NRC) to determine whether or not to relicense the plant for another 20 years.

Back in December, a federal panel ruled the plant's corrosion management plan was sufficient to warrant relicensing for another 20 years. Oyster Creek must be relicensed in 2009. It generates approximately 6% of New Jersey's electricity.

Here at CIANJ, we support allowing the NRC to do its job and determine whether or not the plant is safe enough to continue operating. Attempts by self-titled "public interest" groups to spread false information should not cause the state to interfere with the federal relicensing process.

Both you regular blog readers know this all by heart. There is presently one and only one source of power which can generate sufficient amounts of power while emitting virtually zero greenhouse gases. If we want to actually reach the carbon reduction goals set by the Governor and legislature, then nuclear power must be part of the matrix.

UPDATED: Bringing Jobs to New Jersey's Cities

Update: The legislation, S-3043/A-4666 was passed by both committees today and is likely to be voted on by the full Senate and General Assembly on Monday.

Today's Star-Ledger reports on legislation we first noted here at NJ Business Matters last week. The proposal would develop a program to incentivize companies (including TD Bank) to make major investments within New Jersey's transit hubs by offering tax credits to those creating large numbers of jobs around our rail stations. Eligible areas under the CIANJ-supported bill would be within a half-mile of transit stations in the cities of Camden, Trenton, Newark, New Brunswick, Paterson, Elizabeth, Jersey City and East Orange.

A target of the legislation is TD Bank, which is working toward acquiring Cherry Hill based Commerce Bank, and may open a new office in the Garden State.

A U.S. subsidiary of the Toronto-based bank already owns a smaller bank, based in Maine, and has a financial stake in Ameritrade, based in Jersey City. TD Bank previously said it is considering a move to New Jersey, among other states.

The bill (S3043) is sponsored by Senate President Richard Codey (D-Essex), but is the brainchild of Rose's economic growth office.

The measure would provide up to $75 million in tax credits to match a company's capital expenses -- including construction, renovation, leases, equipment and furnishings -- incurred when locating corporate offices within a half mile of a transit station in a city that is eligible for urban aid and where a large percentage of property is off the tax rolls.

The corporation's move to the city must create at least 200 new jobs, according to the bill, and the credits would be spread out over 10 consecutive years.

The legislation to bring jobs and investments near our mass transit hubs (which is of course opposed by the Sierra Club) will be considered later this morning by the Senate Budget and Appropriations Committee and the Assembly Appropriations Committee. We'll bring you the results later today. 

Rolling Out the Welcome Mat for Trial Lawyers

The major brouhaha in Trenton today will be over the proposed school funding formula (which CIANJ supports with amendments). However, a bill of great importance to NJ's business community and anyone that pays insurance will also be considered in the Senate Budget and Appropriations Committee.

S-176 would change New Jersey's Wrongful Death Act, allowing plaintiffs to sue for unlimited damages for emotional pain and suffering. Keep in mind, NJ already allows for suit to be brought not only for lost income, but for damages such as the monetary value of parental guidance and care provided by the victim to his or her dependents; the value of household services provided by the victim, and hospital, medical and funeral expenses. The system offers a certain degree of predictability when setting insurance rates and reserves, and that predictability is a necessary factor when businesses choose where to expand and locate.

To fundamentally alter that system and allow suits based on emotional grief would drive insurance premiums higher, as insurers would have to account for potentially being sued for unlimited damages, and place NJ’s Wrongful Death statute outside the mainstream thus making us a destination for plaintiffs’ attorneys.

Passage of S-176 would harm New Jersey’s competitiveness as only six states allow for the unlimited recovery of non-pecuniary damages, and none of those are direct competitors with us. Our state’s Wrongful Death Act has worked well, both compensating relatives of the victim and in protecting the business community from uncontrolled juries. We'll be down in Trenton to deliver that message today and help keep NJ from becoming a haven for trial lawyers.

To view a survey of business leaders' attitudes toward NJ's legal system and the way it is already driving prices higher for consumers, click here.

Over A Barrel

When you're a business lobbyist, it can be tough to draw the line from Trenton policies to the kitchen table of not only business owners, but to the state's consumers and taxpayers. Today's Asbury Park Press makes it easy, with their article on how shipping restrictions on wine here in New Jersey make it impossible for Garden State residents to order the specific wine they seek and for our wineries to grow.

New Jersey does not allow wine to be shipped directly to customers, a restriction not placed on residents or vineyards in most other states.

"If laws changed, I think it would dramatically affect our business," said (winemaker Carmen) Stark, who came to Unionville from Napa Valley.

Many regions across the country are trying to become another Napa Valley or Sonoma, with wine industries that attract tourists.

But laws in some states still prohibit wineries from shipping directly to consumers, two years after a landmark U.S. Supreme Court ruling led many to believe that all states would allow vineyards to ship wine directly to consumers across the country.

The Supreme Court ruling overturned laws in New York and Michigan that prohibited consumers from buying wine directly from out-of-state wineries. Wineries and consumers had sued, alleging those states violated the Constitution because they allowed in-state wineries to ship directly to consumers but prevented shipments from out of state.

The court said either all wineries should be allowed to ship directly to consumers or none, but each state still decides whether to allow shipments....

Allowing direct shipping would add another benefit for less prominent regions whose wines haven't been reviewed by influential wine publications, which don't want to write about wines that aren't accessible to everyone, said Jim Trezise, president of the New York Wine & Grape Foundation.

"In order to get broad-based respect, you need national distribution," he said. "You can get respect, but it's narrowly focused with the few people who can get your wines."

The ruling and a subsequent new state law allowed New Yorkers to receive wine from California and other states.

At the same time, it also opened channels of commerce to allow consumers in other states to directly receive New York wines, Trezise said. He noted that last year, the Finger Lakes region of New York State and the North Fork of Long Island landed on the cover of Wine Spectator.

That's attention emerging regions can only dream about.

Just a simple example of what restrictive policies can do to both the consumer and to local businesses, whose customer bases are artificially limited.

The article also notes that Senator Lesniak and Assemblyman Burzichelli would favor changing Jersey's arcane policies. CIANJ would be eager to work with the Chairmen of their restrictive committees.

Moving From Tax and Spend Policies

As this legislative session winds to a close, policymakers increase their focus on the 2008-'09 budget, which is facing a structural deficit of about $3 billion - the nation's third highest burden.

Tom Hester does a nice job of breaking down the Governor's avenues for addressing that deficit. Governor Corzine promises spending cuts are in order and will neither rule out nor promise a tax increase. And of course, there is the issue of asset monetization.

He hasn't said how much tolls may increase, though at least a 45 percent increase is necessary to widen the Turnpike and fix bridges on it and the Parkway.

Corzine wants to use money from the deal to pay at least half of the $32 billion in state debt and provide money for transportation needs.

The notion of 'selling' state assets in return for immediate funds is not fundamentally opposed to taxpayer interests, especially if it results in paying down the debt in today's dollars rather than tomorrow's. However, attached to it must be a guarantee that monies received will actually be spent for that purpose and some sort of mechanism must be developed to ensure toll rates are predictable and do not become overbearing.

Governor Corzine is scheduled to introduce his formal plan January 8th. 

Happy New Year!