NJ Business Matters: The Blog of the CIANJ

Paid Leave Mandate To Be Signed Friday

On Friday, Governor Corzine will sign legislation making New Jersey a more expensive place to live, work and do business. The bill (A-873) will make NJ the second state with a paid leave mandate on virtually all businesses. 

From CIANJ's press release,

“Once again, Trenton has chosen to increase the cost of doing business in one of the nation’s most expensive states,” said CIANJ President John Galandak. “Creating this mandate during an economic downturn only exacerbates the negative message sent to companies considering locating to or expanding within New Jersey. Benefits are nice, but a job is essential.”

Remember that last line. In 2007 New Jersey added just 3,700 private-sector jobs, growing only 0.1%. That put the Garden State 41st in the nation. Meanwhile, NJ has already lost 10,000 private-sector jobs in 2008. Adding mandates unique to the state only worsens that trend. Call it subtraction by addition.

1,900 Kids in D.C. Benefit from School Choice

Later this week, D.C. Mayor Adrien Fenty will go to Capitol Hill in the hopes of protecting the interests of the 1,900 children in his city's popular school choice program. A program so popular, that demand has outstripped resources. Today's Washington Post editorializes in favor of funding the program and putting student achievement above political points. Obviously, there are parallels to New Jersey's proposed tax credit scholarship program and one of the most clear is the myth used to argue against it - that public schools will be harmed.

The WaPo closes,

Of all the arguments against vouchers, the most pernicious is that they hurt public schools. Never mind that D.C. public schools benefit financially from the funding formula. Public schools failed long before vouchers were even conceived of, and no less an authority than D.C. Schools Chancellor Michelle A. Rhee dismisses that argument out of hand. As she told the Wall Street Journal, "I would never, as long as I am in this role, do anything to limit another parent's ability to make a choice for their child. Ever." Let's hope Congress feels that same compunction.

Ditto for the New Jersey legislature.

Nuclear Power, Meet the Law of Supply and Demand

Business groups across the state continue to show their support bolstering New Jersey's nuclear energy infrastructure. This week, NJBiz tried to gauge their feelings on New Jersey's Draft Energy Master Plan, which acknowledges that nuclear generation will likely be part of our energy future if we hope to meet carbon emission goals and energy needs.

While we here at CIANJ are still digesting the EMP's impact on energy costs, we do have some thoughts on the benefits of adding nuclear capacity,

"We don't believe the state can meet its energy needs and carbon reduction goals without nuclear power," says Paul Tyahla, vice president of government affairs and communications at the Paramus-based Commerce and Industry Association of New Jersey. Nuclear power, he explains, is the only available source that can produce energy on a large scale but generate virtually no greenhouse gas emissions. "Anything that can increase the supply is going to help lessen upward pressure on energy costs," he says.

Astoundingly well put, no? Mandatory self-promotion aside, the NJ Chamber of Commerce offers similar thoughts,

[The Chamber] supports the state's goal of using renewable energy sources such as solar and wind power to help meet its electricity needs. But "those energy sources are not going to be able to do it alone," says Michael Egenton, the state chamber's vice president of environment and transportation.

In fact, a report conducted by Polestar Applied Technologies found that New Jersey cannot reach its CO2 reduction goals without nuclear power - and that includes the relicensing of the Oyster Creek Generating Station, which is up for renewal in 2009.

There are plenty of myths about nuclear energy and its risks. It's good to know that at least some in the Administration are not willing to ignore the law of supply and demand when it comes to our energy future. Check out the interview below with Dr. Patrick Moore, co-founder of Greenpeace, on the changing mood on nuclear energy.

Keeping It Simple

A feature article in Sunday's Asbury Park Press picks up on a report we featured here at NJ Business Matters last week - New Jersey's slow job growth relative to its neighbors. The Garden State added just 3,700 private sector jobs last year - 0.1% of its overall workforce, which ranks NJ 41st in the nation. We recommend the entire article as a must-read, but the introduction about sums it up,

Adrian Stevens can't pinpoint the exact moment he decided to sell his restaurants and move to Florida, but he knows how he felt.

He felt frustrated because his taxes and fees kept increasing. He felt confused because he didn't know what would come next. And he felt sad because he had to leave New Jersey, the state where he was born and raised his family.

"It's death by 1,000 cuts," Stevens said

This state has natural advantages that are the envy of other markets around the world. The trouble with some of the "pro-business" initiatives taken up by governors and legislatures is that so many boil down to companies sending money to Trenton, only to have it sent back with strings attached. Creating a low tax and regulatory environment is the best way to attract and retain business in the state. Always has been, always will be.

A True Measure of Reform

Last week we blogged on a tax credit scholarship bill that CIANJ has been proud to support for more than seven years, and which will finally be given committee hearings this Spring. Today, we highlight an op-ed in the Trenton Times that points to the bill as a revolutionary step necessary to reform our school system.

A quick rundown of the S-176,

• Corporations would make tax deductible contributions to scholarship organizations in seven cities - Newark, Camden, Trenton, Orange, Lakewood, Elizabeth and Paterson.
• Children in these cities whose families earn less than 250% of the federal poverty level can use the scholarships to attend a public or non-public school of the student's choice.
• The tax credit scholarships offer savings both in reducing per-pupil expenses and in the avoidance of school construction costs
• Public or non-public schools participate in the program on a voluntary basis.

The bill allows poor children in these cities the opportunity to attend a better school, and it offers savings to New Jersey's overburdened taxpayers. It is already being successfully implemented in Pennsylvania, to the benefit of 25,000 children and with the help of more than 2,000 corporations. Remember that in some Abbott districts, about half of all students fail to pass the High School Proficiency Assessment, which the education commissioner has called a "middle school level test." This is despite some of the highest per-pupil spending figures in the nation.

The fault is not with the students, but rather with a system that remains in staunch opposition to necessary reform and that believes there is an increased funding solution to virtually every problem.

As Hank Butehorn succinctly writes it in the Times,

Rather than following the failed court-mandated policies of the past, New Jersey lawmakers should be pushing this tax credit scholarship plan to help children in failing schools, advance educational opportunities and ease the economic burden of education (and related construction). The empirical evidence will then lead to full implementation of school choice.

In a budget season of priorities, improving education while simultaneously saving taxpayer dollars should be atop the list.

Bad Science, Anti-Business Courts and Falling Competitiveness

The US Chamber of Commerce has released their annual rundown of the lawsuit climate throughout the states. New Jersey came in at number 35, a drop of nine spots from last year and this is the first time the Garden State has found itself outside the top 30.

A primary reason is the entrance of...how can we be polite?...junk science into the courtroom. As you might imagine, that junk science is used to justify lawsuit awards, often times against pharmaceutical companies. As our astute blog readers have already gathered, this has an impact on New Jersey's ability to compete and create jobs.

Chamber CEO Tom Donohue said at a morning press conference that lawyers offer a key perspective on the question of how much protection companies can expect to get from a fair and just court system.

"All the people we are asking are the people that represent people that spend a lot of money investing in states, creating jobs, moving companies," he said. "Risk consideration is becoming more and more significant in where money is put."

Sixty-three percent of respondents said a state's litigation environment is likely to affect important business decisions at their company, such as where to locate or do business.

Ever timely, we'll take this opportunity to promote our very first "Guest Blogger" here at NJ Business Matters. Marcus Rayner, Executive Director of the NJ Lawsuit Reform Alliance, will be joining us in a few weeks to blog about all-things tort reform.

Below is a one-minute interview with US Chamber CEO Tom Donohue on the nation's lawsuit climate.

No Christmas Tree, No Christmas Tree

Senator Barbra Buono, Chair of the Senate Budget and Appropriations Committee, has expressed her support for the elimination of so-called Christmas Tree spending in this year's budget. The budget items add millions of dollars to the state budget to fund pet projects of legislators. Following an ethics tussle regarding the grants, they were reduced to a total of $112 million last year.

CIANJ supports Sen. Buono's recommendation as an effort to protect New Jersey's overburdened taxpayers, and it appears she has bi-partisan support,

"I believe we need to restore balance to the burden all of us must share during these extremely painful economic times," [Buono] said.

The budget adopted last June included an estimated $112 million for additions for legislative districts, the lowest total since Democrats regained control of the Statehouse in 2002.

Sen. Leonard Lance (R-Hunterdon), a veteran budget committee member, said he agrees with Buono that there is no room for such spending, commonly known as "Christmas tree" grants, given that Corzine is proposing deep cuts to municipalities, hospitals, nursing homes, colleges and other groups.

This budget, like all, should be about the role of government in our lives. Some Christmas Tree items may be worthwhile causes, but there are many worthwhile causes - why don't taxpayers pay for them all? We see Sen. Buono's recommendation and Sen. Lance's support as a positive step in that conversation.

Jersey's Job Growth Continues to Slide

In a year in which New Jersey has already lost more than 10,000 private sector jobs, Rutgers University has unveiled a study demonstrating our 2007 growth was slower than neighboring states. In 2007, NJ added only 3,700 private sector jobs, or about 0.1% of its workforce. To compare, here is a rundown of growth figures in nearby states:

• New York - 1.2%
• Connecticut - 0.8%
• Massachusetts - 0.7%
• Pennsylvania - 0.6%
• New Jersey - 0.1%

Overall, New Jersey ranked 35th in job creation as a percentage of its overall workforce. If we want to maintain a high quality of life, those numbers have to change - and fast. A good start would be for Governor Corzine to veto the job-killing paid leave mandate that sits on his desk.

Italy to Join Nuclear Revival?

From Forbes.com:

FRANKFURT (Thomson Financial) - Enel SpA. plans to build a nuclear power plant in Italy to take advantage of a possible legislative shift in Italy making nuclear power production legal, Financial Times Deutschland reported, citing chief executive Fulvio Conti....

Some 65 percent of Italy's electricity is currently generated from natural gas, and 20 percent is covered by imported power. Conti said Enel could help 'lower this dependence'.

'The revival of interest in nuclear energy gives us another important opportunity to remove the infrastructure deficit and to reduce the cost of energy,' he said.

A novel idea in a country that has had a ban on nuclear energy since 1987. And if a country that opposed to nuclear power can recognize the environmental and cost benefits of building a new nuclear facility, surely the US and New Jersey in particular can turn the same corner. The hurdle that Italy is in the process of overcoming is a political one, not scientific.

Happy Earth Day, Nuclear Energy

Last week the Corzine Administration released its Draft Energy Master Plan, which sets energy policy in the state, and is re-drafted every ten years. Today's Record editorial picks up on a realization within the Draft EMP that CIANJ fully supports - the benefits of nuclear power, especially in today's energy climate.

All two of you regular blog readers know that nuclear energy is the only technologically available source of power that can both produce energy on sufficient scales, while generating virtually zero greenhouse gas emissions. Without it, New Jersey cannot reach its carbon reduction goals. You also know that CIANJ works with the good people at the NJ Affordable, Clean, Reliable Energy Coalition to build public awareness about all of our energy options. The Record accurately points out the opportunity for growth in one of those choices,

...fission can contribute substantially to the energy supply without producing carbon dioxide and the other emissions that are changing the climate by trapping more of the sun's heat. Nuclear power is also relatively cheap, another important consideration amid rising energy costs and rates.

A draft of a new energy master plan for the state, released last week, notes that Governor Corzine's ambitious goals on reducing greenhouse gases "point toward the need to produce carbon-free electricity at a lower price per megawatt-hour than fossil-fueled plants." That means renewable energy resources such as solar and wind power, cleaner coal technology and nuclear. Of those, nuclear is the only one already providing a substantial portion of the state's energy (about one-fifth).

There are still plenty of individuals and groups that dismiss nuclear power out of hand because...well, just because. What better day to spread the truth about nuclear power than today?

More In Checks Than Balances

Did you hear the one about the school bus drivers that were each paid $345 per month in overtime for charging their cell phones? If not, then you missed out on the latest only-in-New Jersey punchline that brings to the forefront the issue of school district accountability.

The bus drivers were guaranteed six hours per month of overtime to charge their cell phones as part of a union contract that was negotiated and approved by school board officials in Union City. The total cost to taxpayers ranged from $39,000 to $73,000 per year.

Here's where the punchline creates more than a few hecklers: Union City is an Abbott District, which means the town cannot afford the cost of a thorough education on its own, and receives the majority of its funding from state taxpayers - not the taxpayers in Union City. Which is where accountability crashes into NJ political reality - the taxpayers who had their pockets picked are not the same taxpayers who get to vote for Union City's elected officials.

It may not be fair to punish the kids in Union City by withdrawing funds because their school 'leadership' dropped the ball, but it's not fair to the taxpayers to subsidize the aforementioned fumble either. If government did not have the monopoly it currently does over education, then parents could send their kids to a school that does not waste resources on things like paying someone overtime to charge their cell phone, and accountability and efficiency can slowly creep their way back into Jersey's school system.

Who could possibly object to that? 

School Choice Bill Finally Set To Get Its Hearing

Saturday's Asbury Park Press carried good news on the school choice front: a new version of the Urban Schools Scholarship Act will finally get a committee hearing.

CIANJ has been in support of this bill for seven years, and the pilot program would function this way:

• Corporations would make tax-deductible contributions to scholarship organizations in the cities of Orange, Camden, Lakewood, Newark, Paterson, Elizabeth and Trenton.
• The scholarships would be distributed to poor children in these districts to be used at other public or at non-public schools.
• Scholarship amounts would be awarded at about $6,000 for K-8 students and $9,000 for high schoolers. Those totals are about 40%-60% of the current cost of educating students in failing urban schools.

The program allows poor children in these cities to attend better schools while simultaneously saving taxpayer dollars.

Dan Gaby, [New Jersey Excellent Education for Everyone's]executive director, said the program would collect $24 million from business in its first year, funding about 4,000 scholarships of $6,000. The loss of revenue to the state through tax credits, Gaby said, would be offset by the $18,000 the state wouldn't have to spend educating scholarship recipients in public schools.

"Children ought to have a right to be able to opt out of failing urban school systems," Gaby said. "Everyone has school choice if they have money. And our argument has always been those children without money should have those same opportunities."

The bill has languished on desks of legislators for the better part of this decade. Look for a hearing, which will be chock full of NJEA opposition, sometime next month.

Early Retirement, Later Costs

Yesterday, State Treasurer David Rousseau told the Assembly Budget Committee that the Governor's plan to entice state workers into early retirement would save NJ taxpayers $136 million this year and $161 million next year - IF it is approved by May 15th. That's unlikely to happen.

While we support the Governor's effort to reduce the government's payroll, New Jersey has been down the road of early retirements before. Multiple times, in fact. The result has always been the same - workers take the incentive and taxpayers pay retirees more money than they would have in retirement. Then, the now-vacated positions are filled in short order, meaning the size of government is not reduced.

Governor Corzine promises this plan will be different, because the Administration will not fill more than 10% of vacated positions. However, the Gov cannot dictate that to future Governors or future legislatures. Taxpayer protection beyond this Governor would be minimal.

Corzine is correct when he says that the alternative, layoffs, is nearly impossible because of current civil service laws. In our opinion, that's a great argument for reforming those civil service laws and not for trying the same failed policy again.

Fortunately, there's still time.

About Those Property Tax Rebates

PolitickerNJ is conducting a series of interviews with Assembly Speaker Joseph Roberts. The installment released today features the Speaker discussing his plan to swap property tax rebate checks (which come out around election time - wink) for a tax credit given when state income taxes are filed. It costs NJ $10 million to send out the annual rebate checks. The one-minute clip is available below.

Lurching Toward Real Reform

Sen. Barbara Buono yesterday announced her support for undoing a legislative gift to retired state employees, and for creating savings for New Jersey's overburdened taxpayers.

In 2001, as the state approached legislative elections and the economy was on more stable grounds, the legislature decided to do a favor for retired state workers. At the time, the formula for the amount of money a worker would receive in their retirement years was the number of years worked divided by 60 (n/60). For example, an employee working 30 years would receive half their salary during retirement (30/60=50%).

That changed in 2001 when the legislature acted unilaterally - not through the bargaining table - and changed the denominater in that equation to 55, which is where the formula still lies (n/55). That same worker with 30 years of service now gets 55% of their salary in retirement (30/55 =55%). The benefit increase did not only extend to those currently on the payroll, but to all retirees; even those who were living in Florida for 15 years.

What the legislature giveth, Senator Buono proposes the legislature can taketh back. CIANJ supports the roll back, as New Jersey needs to bring its retirement system more in line with the private sector and we applaud Senator Buono for showing the political courage to re-introduce the idea before the legislature.

As we maintained during the special session on property taxes, rebate checks are no substitute for the fundamental reform necessary in this state. Sen. Buono's proposal is a step forward in that effort. 

The Record Holds Its Applause on Paid Leave

Kudos to the editorial board at The Record for acknowledging the legitimate questions being asked about New Jersey's proposed paid leave mandate - questions still not adequately answered by NJ legislators.

All two of you regular blog readers know CIANJ's objections to the paid leave bill sitting on Governor Corzine's desk: that it will put NJ's already fragile business climate in further jeopardy, it could leave small businesses exposed to lawsuits and no one really knows what the program will cost. There are no contingencies in the bill if the paid leave fund were to run a shortfall.

As the Record aptly notes,

The state's business climate is not robust. Any bill that may further erode the stability of small businesses across the state gives pause for thought.

We still believe that paid family leave is well intended. But given the current business climate and the unknowns in implementing paid family leave in New Jersey, we are also concerned that paid family leave may do little good if workers find themselves unemployed.

As your trusty blogger wrote to the Star-Ledger on Sunday, business groups have not argued that paid leave is a bad idea...as a benefit offered by companies. However, government should not be mandating how each business in the state manages once-in-a-lifetime events.

Maryland Goes on the Spending Spree

Jersey's budget crunch has many causes, but one of the underreported ones is the state's high-reliance on high income wage earners. Despite what you might hear from groups pressing for even more tax increases on the top 10% of wage earners, NJ's tax structure is already one of the most "progressive" in the nation. Following passage of NJ's millionaire's tax, 5,000 of said millionaire's established residence elsewhere, and during down economic times the budget experiences unsustainable shortfalls.

Maryland appears ready to follow suit, and today's Wall Street Journal editorial, "New Jersey on the Chesapeake" explains the foolhardiness,

As California and New Jersey have shown, a steeply progressive income tax makes state revenue highly dependent on relatively few earners. In good times, those earners do well and the pols spend the excess revenues. But in slowdowns, the state quickly finds itself in deficit, and, true to this form, Maryland's pols now find themselves on the New Jersey ratchet to ever higher rates.

For 190 years, New Jersey somehow managed with no state income tax.

Don't Tax You, Don't Tax Me; Tax That Suit Behind the Tree

We're actually surprised it took this long.

A new coalition has formed with a solution for New Jersey's budget troubles - $2.3 billion in higher taxes for our citizens and businesses. CIANJ just issued a press statement in which association President John Galandak calls the ideas "some of the most counterproductive to be proposed in 2008." Bingo.

Among the proposals are:

• Higher income taxes on the top 10% of Nj's population - $500 million (NJ has the second highest income tax rate in America)
• Higher gas tax, license fees and vehicle registration charges - $1.4 billion
• "Re-evaluating" job creation programs - $300 million

Business Employment Incentive Program (BEIP) grants have helped create 70,000 jobs since the program's inception. NJ should continue to fund such a program that has resulted in billions of dollars in new investment in the state - especially during a year in which NJ has already lost more than 10,000 private sector jobs.

Give the legislature and Governor credit; in public hearings they have remained dedicated to an overall budget which is less expensive than the previous year. They must avoid taking a giant step backward and down the road of higher taxes which helped create the current business climate. 

The WaPo is Kinda, Sorta In Favor of Tort Reform

The Washington Post appears to be ever-so-slowly moving toward being ok with some measure of tort reform, and it only took a few criminal convictions of plaintiff attorneys.

Sure, they do a balancing act in the process, but the conclusion demonstrates the need to shine a light on the plaintiff bar's practices and to bring more balance to our system.

The truth is that there have always been and will always be voracious and ethically challenged lawyers, just as there have always been and will always be voracious and ethically challenged people in business. Both sets of scoundrels deserve to be punished. What is needed now is a sober discussion about how best to achieve a fairer, more balanced legal system through comprehensive tort reform. Such a system would not be lopsided but would shield businesses from legal blackmail, just as it would protect the rights of legitimate plaintiffs to win just compensation from negligent businesses that caused them real harm. Smart and ethical businesspeople and lawyers -- and, yes, there are many who fit the bill -- would be wise to start working together to craft such a fix.

Agreed, and that goes for New Jersey's tort system as well - ranked as the second most hostile to business by the Pacific Research Institute.

Mom, I got a 22%!

The National Taxpayers Union has released its annual Congressional scorecard - full of information on the biggest spenders and taxpayer savers in Congress.

The full report is available here, and the scorecard takes into account 427 House roll call votes and 182 from the US Senate.

Here's how Jersey faired in the House of Representatives

Andrews..................F...............4%
Ferguson.................D.............26%
Frelinghuysen ...........C .............53%
Garrett...................A .............88%
Holt ......................F...............5%
LoBiondo ................D .............24%
Pallone ...................F...............4%
Pascrell...................F...............6%
Payne.....................F...............5%
Rothman..................F...............4%
Saxton ...................C-.............37%
Sires ......................F...............5%
Smith......................D .............26%
State Average-House....................22%

And in the Senate

Lautenberg..............F..............9%
Menendez ...............F..............7%
State Average .........................8%

Who Cares About New Jersey's Competitiveness

CIANJ thanks the 15 Senators who voted "NO" on making New Jersey the second state with a paid leave mandate on virtually all employers. The full roll call vote is available here.

The Senators who voted NO, despite enormous pressure are:

Senator Kip Bateman (R-16)
Senator Jennifer Beck (R-12)
Senator Anthony Bucco (R-25)
Senator Gerald Cardinale (R-39)
Senator Andrew Ciesla (R-10)
Senator Leonard Connors (R-9)
Senator Nia Gill (D-34)
Senator Phil Haines (R-8)
Senator Tom Kean, Jr. (R-21)
Senator Leonard Lance (R-23)
Senator Steven Oroho (R-24)
Senator Kevin O'Toole (R-40)
Senator Joe Pennacchio (R-26)
Senator Robert Singer (R-30)
Senator Shirley Turner (D-15)

In the previous voting session on the issue, Senators Joe Kyrillos (R-13) and Sean Kean (R-11) voted no. Neither were present today. Senator Ron Rice (D-28) was present, but not voting. In the previous session, Senator Rice said that he supported the spirit of paid leave, but noted his concerns over the impact on small businesses. He cast no vote during that session as well.

The Governor has already hailed Senate passage of the mandate, which is obviously bad news for those of us calling on him to veto it.

"Liberty and Prosperity" - Update: Paid Leave Mandate Passes

With the state motto used as a headline for this entry, we direct you to the video of today's Senate session. Paid family leave is one of the few agenda items on this rare April voting day, and its debate and vote will consume the majority of floor time.

We'll post the final vote and CIANJ's response as soon as it happens.

Update: The Paid Family Leave Mandate has passed by a final vote of 21-15. Because of the "special" nature of today's vote, not all Senators were in attendance. We will post the roll call shortly.

In the interim, here is a link to CIANJ's press release.

Roll Call Vote on New Jersey's Competitiveness

Early this afternoon, the Senate will cast its final vote on whether to impose a paid leave mandate on virtually all employers in the state. It's a new week, and there is a new study regarding just how expensive the program will be. This time, it is the American Consumer Institute that claims the Office of Legislative Services has underestimated the program's costs.

Bill advocates have claim that only about 1% of New Jersey's workforce will utilize the program, and the bill uses these assumptions when setting the tax rate. This is based largely on California's experience with paid leave. What they fail to mention is that because it is so new, only 28% of Golden Staters know about the program. They also do not take into account the increasing number of paid leave applications and the rising costs - an $80 million jump in just two years. Remember, there is no contingency in the bill for what would happen if the $33 per year tax on employees is not enough to cover expenses.

This is all in addition to the issues of competitiveness and lawsuit exposure that we've already detailed here at NJ Business Matters.

It's a special voting session for an especially harmful bill. We will post updates throughout the day. 

Trial Lawyers Try Again for Unlimited Damages

During the flurry of activity in the final days of the 212th legislature, both houses passed the trial-lawyer supported expansion of New Jersey's Wrongful Death Act. The bill would have made New Jersey one of only a few states to allow for unlimited damages for emotional grief, in addition to New Jersey's already expansive definition of economic loss.

CIANJ opposed the measure based largely on its impact on insurance premiums. Removing predictability from lawsuit awards makes it difficult to set premiums, and that could easily translate into higher costs for the state's businesses and governments.

Governor Corzine agreed and pocket-vetoed the measure, but as yesterday's New Jersey Law Journal (subscription required) notes, the trial-lawyers have worked to have the bill re-introduced. Oh by the way, they are still opposed to setting monetary caps, such as $250,000 for emotional grief.

The bill would amend the Wrongful Death Act to allow recovery for mental anguish, emotional pain and suffering, loss of society and loss of companionship. Those damages would be available to those entitled to intestate succession of the decedent's personal property, namely spouses, children and parents....

(Amos) Gern, of Roseland’s Starr Gern Davison & Rubin, says supporters of the bill will likely be amenable to language allowing judges to “review any verdicts rendered good or bad, high or low.”

But efforts to set caps, like the $250,000 ceiling proposed last year, will likely continue to be opposed, he says.

(State Senator Nicholas) Scutari agrees, saying, “I doubt it.”

Sadly, we're not surprised.

Paid Leave Vote Monday

The Senate rarely meets in April, but Monday the 40 legislators will be back in Trenton to cast their final votes on the job-killing paid leave mandate. The program would make New Jersey only the second state with such a program, joining California, and the vote comes at the same time Governor Corzine admits tax receipts are coming in below expectations and that he may have to cut an additional $500 million from the state budget. Remember that the state has already lost more than 10,000 jobs in 2008.

When the Senate last voted on paid leave a month ago, it narrowly passed, 22-16. Since then we've learned a few things,

• Job losses for the year increased, bringing unemployment up .3% to 4.8%
• The non-partisan Office of Legislative Services indicated the bill could leave small businesses exposed to lawsuits.
• New data from California puts in doubt the assumption that only 1% of New Jerseyans will use paid leave. There are no details in the bill outlining what would happen if the paid leave program ran a shortfall.

All of this in addition to what we already knew - the mandate will harm New Jersey competitiveness, drive costs higher for our companies and put small businesses in the position where they may be violating federal anti-discrimination laws.

We need a special voting day for that? Click here to show your opposition.

Hangin' Tough

We don't agree with Sen. Sweeney on many issues, but during the budget crisis of 2006, the Senator (who is also a Business Rep. for Iron Workers Local 399) was one of few voices within his party willing to admit that public employee costs were the primary reason for out-of-control spending, and he worked to address it.

Advocates for the Governor's toll road proposal claim that debt service is consuming an unacceptably high share of our budget. A reminder that in the last ten years, employee benefits increased by $4.3 billion, more than three times the rate of spending increases on debt. Sunday's Asbury Park Press outlined the Senators "outrageous" proposal to bring public employees more in line with the private sector, including,

• Reduce paid holidays, not vacation days, from 13 to 10.

• Bar married employees from receiving health benefits from more than one public employer. Couples now can have the state pay for two health plans.

• Make employees with state health benefits pay at least 10 percent of the premium. (When Sweeney proposed the bill, state employees paid nothing other than small co-pays.)

Only 10 paid holidays?! Surely you jest.

Had Sen. Sweeney's proposals become law, then the budget would have saved $1 billion this year. Maybe they're worth looking at again? Especially given half of New Jersey residents prefer "steep budget cuts" to increased taxes or tolls.

Good News, Bad Sub-headline

Governor Corzine is proposing a $260 million bailout of the Unemployment Insurance (UI) fund, following years of diversions over the objection of business and labor.

The UI fund is filled by a tax on workers (totaling about $305 million per year) and employers (totaling about $1.5 billion annually). If the fund has less than 1.4% of the total payroll of all employees in the system, then an automatic $350 million tax hike is imposed on the state's companies. There is no automatic trigger for additional employee contributions.

It is because of this arrangement that CIANJ objects to diversions from the fund. Since 1993, more than $4.7 billion has been diverted from the UI fund to pay for other state budget items. Now that economic times are rough, that rainy day money is not available and the UI fund is forecast to be below its magic number.

The Gov's plan of moving $260 million into the fund is welcome news. If the legislature approves the cash infusion, it means the $350 million tax increase can be avoided, and it seems like the legislature is willing,

"This strategy will protect both our vulnerable unemployed population as they struggle during these difficult economic times, as well as our state's business community," Corzine said in a statement announcing the bailout plan today....

Yesterday Sen. Barbara Buono (D-Middlesex), chairwoman of the Senate Budget and Appropriations Committee, endorsed Corzine's proposal.

"Hopefully the Legislature is ready to replenish the fund to make up for past budget mistakes," she said.

Thanks for clearing that up, Sen. Buono. The Star-Ledger sub-headline calls this a bailout for employers, who will be able to avoid a tax increase. Respectfully, we see this as a bailout of the legislature and their previous inability to show fiscal restraint.

We Thought Congress Wanted Higher Gas Prices? - Updated

Update at 10:51 a.m. - Check out this post from the good people at the Tax Foundation on the comparison of oil company profits to government tax collections since 1981 - glass houses and whatnot.

Good for the Wall Street Journal's editorial board for pointing out the opposing messages coming from Congress on energy policies. Their cap-and-trade scheme would supposedly have the net effect of driving energy prices higher, thus reducing demand and protecting the environment. Yet yesterday, they put on a dog-and-oil executive show to blast oil companies for high profits at a time of high energy costs.

The oil executives performed a public service by pointing out other economic realities. About 70% of the price of gasoline is determined by the global price of crude, which is rising because of world-wide demand and volatility in the commodities markets, not to mention the Federal Reserve's easy-money policy. Congress might also look to its gas mandates and the corset it has laced around domestic production....

(Committee Chairman, Rep. Ed) Markey also used the occasion to threaten special tax increases, grilling the executives about $18 billion in "subsidies," which are actually a tax deduction that Congress itself extended to all manufacturers, including Big Oil. And he demanded that the companies commit 10% of profits to renewable energy. But as an Exxon vice president put it, fossil fuels are still going to account for at least two-thirds of the world's energy consumption in three decades and whatever scientific progress is made, the practical prospects for alternatives remain "very, very small."

The War on Talent

It's April 1st - a day for fools, baseball, Heideggerian tax-angst and the day we as a country decide how much talent is too much.

H-1B visas are used for highly-skilled immigrants with a degree and a job waiting for them in the United States. Once upon a time there were 195,000 issued annually. Now,there is a cap of 65,000 and with applications due today, the government will likely run out of visas by the close of business. And what does this mean if you're a firm who has identified workers you'd like to employee?

Microsoft, for example, is petitioning to hire 1,600 foreign engineers. But company officials said they would be lucky to gain 40 percent of those requests in this year's contest, which begins today and ends April 7.

"It'll be worse than last year," said Jack Krumholtz, Microsoft's managing director of federal government affairs. "Because only 65,000 of these desperately needed visas are made available, it is highly likely that this year's supply of visas will once again be exhausted in a single day."....

In the meantime, Microsoft recently opened a complex in Canada to accommodate about 150 foreign engineers whom it was unable to fit in under last year's program. The complex is located in an office park in Vancouver relatively close to Microsoft's headquarters in Redmond, Wash.

Microsoft officials said the average salary it pays a software engineer is $109,000 in direct compensation.

"Canadian immigration laws work to bring these kind of people to the country," Krumholtz said. "They've seen the benefit."

So 65,000 smart people is a good thing - but 75,000 isn't?

Delaware Must Have Some Super-Secret Power Source

The proposed construction of a liquefied natural gas facility on the Jersey side of the Delaware River needs to find a new home, or we'll have to search for a new source of power for the Mid-Atlantic region. We doubt this is what William Penn had in mind when he helped draw state boundaries.

The project proposed by BP would power the equivalent of five million homes by delivering 1.2 billion cubic feet of natural gas daily. Months ago it was the subject of a column in CIANJ's COMMERCE Magazine.

Unfortunately, the Supreme Court has ruled a boundary map drawn in 1682, and a 1905 agreement between New Jersey and Delaware combined to give our friends across the Turnpike Bridge control of the river basin, extending to the Jersey shoreline in the area of the would-be LNG facility.

Opponents of BP's plan hailed the decision as a clear victory for Delaware and its Coastal Zone Act conservation law.

"It's nice to win," said John A. Hughes, secretary of Delaware's Department of Natural Resources and Environmental Control. "Our staff very correctly defined this facility as a bulk transfer facility...unequivocally forbidden under the Coastal Zone Act."

Good for the Coastal Zone Act. Not so good if you're one of the 5 million homes that could have had a clean and reliable source of power, or for those who would have been employed by construction and operation of the $650 - $700 million facility.