NJ Business Matters: The Blog of the CIANJ

Gov's Plan Includes Corporate Tax Reform

As part of his address on an economic stimulus plan for New Jersey, Governor Corzine outlined several initiatives supported by CIANJ. Among the planks for his business-boosting proposal, the Governor mentioned:

• Allowing NJ companies to carry Net Operating Losses forward for 20 years, instead of the current standard of seven.
• Eliminination of the throw-out rule, unique to NJ and West Virginia
• Movement toward a single-sales factor when calculating corporate income

The Governor also announced a program that would pay companies $3,000 for each job they create and retain for one year.

Earlier in the week, your friendly blogger took to the airwaves on New Jersey Now to make the case for corporate tax reform here in New Jersey as a way of helping our companies compete with their peers in other states. The video from that debate is available below.

Jersey Loses 3,900 Jobs in September

New Jersey's September employment figures are being reported and, as expected, the state lost even more jobs in September. There are 3,900 fewer jobs than in August, and the overwhelming majority of loses (3,700) came from the private sector. For the year, New Jersey has lost more than 21,000 jobs, and the unemployment rate now stands at 5.8%.

The breakdown by industry sector is available in the DOL's statement, and here is a link to the more detailed cross-tabs.

From the Star-Ledger,

Along with the financial services losses, the monthly report showed declines in manufacturing, construction, information and government jobs.

Patrick O'Keefe, director of economic research at Roseland-based J.H. Cohn, the largest accounting firm in the Northeast, said the best part about yesterday's jobs report was that it wasn't worse.

"The loss of just under 4,000 jobs in an economy that has over 4 million is not a large number," he said. "I'm not making light of it, but given all the economic turbulence of the past several months and the relentless drumbeat of negative economic news, I thought we would have seen a more significant decline in employment and an significant increase in the unemployment rate."

Later today, Governor Corzine will address a joint meeting of the legislature on his proposal to bolster the state economy. A preview is available here, and you can watch the 12:00 p.m. address here.  

Supporting the Sales Tax Holiday

A proposed partial sales tax holiday has been all the rage in New Jersey this week, and yesterday CIANJ joined with the good people at the National Federation of Independent Business, the NJ Retail Merchants Association and the NJ Restaurant Association in support of the proposal.

Here at Commerce and Industry, we do not have a history of supporting these holidays. Often, they do not encourage economic activity, but instead concentrate it during the holiday. This is different. The proposal made on Tuesday would cut the sales tax by 50% on all goods and services, and it would last for five weeks. That's a far cry from a three day break on back-to-school shopping, and no sales tax holiday has ever lasted more than 17 days. Plus, New Jersey's geographic location gives us the opportunity to lure shoppers from up to four states, just like Alabama did to Florida this year.

Hitting the links:

• Joint statement of support from the four participating organizations
• Transcript of NJ 101.5 coverage
• Coverage of CIANJ support in The Record

CIANJ President John Galandak outlines the need to pass this legislation to give New Jersey companies an advantage, and its consumers relief

Senator Ray Lesniak Discusses the Issues with CIANJ

Here at CIANJ, we offer our thanks to Senator Ray Lesniak (D-Elizabeth) for joining CIANJ this morning for the next installment of our Legislative Roundtable series. The Senator spoke with great candor about affordable housing, education reform and the steps he believes necessary to improve the state economy. Senator Lesniak is the prime sponsor of several important pieces of CIANJ-supported legislation, including the Urban Enterprise Zone Jobs Scholarship Act, and an appeal bond cap bill. This was his first time joining us for a Roundtable.

Left to Right: CIANJ Vice Chair Lou Weiss (WFM Construction Management), Senator Ray Lesniak, CIANJ Policy Chair Jim D'Agostino (JD Enterprises) and CIANJ President John Galandak

Spending Is Not Always Stimulus

New Jersey's lawmakers and Governor are passing bills and promoting growth policies in response to the national economic slowdown. However, Hugh Morley's piece in Sunday's Record reminds us that there is relatively little they can do without a national turnaround.

"Historically, states have found there's not a lot they can do," said Scott Pattison, executive director for the National Association of State Budget officers. "They are part of a national economy, and it's hard for them to affect that."

"So what states tend to do in a downturn is they try to be stimulative in terms of issuing bonds for capital expenditures, like a building on a campus or a bridge," he said.

New Jersey has capital needs that have to be addressed - especially transportation infrastructure. However, as CIANJ President John Galandak articulated, there is a difference between necessary improvements and simply spending to stimulate,

John Galandak, head of the Commerce and Industry Association of New Jersey, urged caution.

"States should not spend money on things they do not traditionally spend money on just to stimulate the economy," he said.

As you have heard us say time and again - there is no substitute for a low tax and regulatory climate. Let's hope we hear that in Thursday's special Gubernatorial address to the legislature.

Weekend TV: CIANJ On NJ's Corporate Tax Structure

As we wrote earlier in the week, New Jersey has the worst business tax climate in America, according to the Tax Foundation. If New Jersey were to neglect addressing this issue, we would be short-changing our economic development, and the ability to grow out of this recession. Regular blog readers know the issues we are pushing to have addressed in the near-term, as we move toward more sweeping tax reform.

On Sunday, yours truly will appear on Channel 9's New Jersey Now to discuss the issue opposite John Shure of New Jersey Policy Perspective. The episode will air this Sunday, October 12th at 12:00 p.m., and be one of three segments.

This is the second time I have appeared with Mr. Shure. For those of you on vacation during the summer, that debate about a proposed minimum wage hike is available below.

More Good News

Jobless claims dropped by 20,000 nationwide. From the AP:

The government says new applications for unemployment benefits dropped last week from a seven-year high, though claims remain at elevated levels due to the struggling economy.

The Labor Department reported Thursday that initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, the same level that Wall Street economists expected.

The department said Hurricanes Ike and Gustav were responsible for adding about 20,000 claims on a seasonally-adjusted basis.

The four-week average, which smooths out fluctuations, rose to 482,500, the highest since October 2001. The Associated Press

Lost In All the Bad News

From NBC - Pending home sales up 7.4% in August,

WASHINGTON - Pending sales of existing U.S. homes unexpectedly jumped in August to the highest in over a year, data from a real estate trade group showed on Wednesday.

The National Association of Realtors Pending Home Sales Index, based on signed contracts, rose 7.4 percent in August to 93.4 from an upwardly revised 87.0 in July on pent-up demand as affordability improved.

Gov Plans Legislative Address on the Economy

Governor Corzine has announced that he will address a special joint session of the legislature on October 16th to highlight his initiatives to improve New Jersey's economy. This follows his economic summit and legislative action on Monday to make improvements to New Jersey's tax code.

We look forward to the Governor's comments. However, it is important to stress once again that there is no substitute for a low tax and regulatory structure. No public works projects, tax credit or job creation program can undo a corporate tax ranking of 50th.

The Governor's plan must acknowledge this reality and further advance the healthy spending reductions he began as part of this year's budget. Listen to this morning's gubernatorial interview with WCBS radio by clicking here.

US Attorney Chris Christie to Speak with CIANJ

CIANJ President John Galandak just sent a message to the entire membership to let everyone know that US Attorney Chris Christie will speak to our membership at CIANJ's 81st Annual Luncheon. Christie will address his office's initiatives to restore faith in our public institutions and fight terrorism. He will join Best-Selling Author Mary Higgins Clark and Governor Jon Corzine (invited) on stage. More information about the event is up on our website.

Come celebrate CIANJ's historic 81st year with us on October 31st.