NJ Business Matters: The Blog of the CIANJ

Assemblyman Munoz Passes Away

Here at the Commerce and Industry Association of New Jersey, we offer our condolences and prayers to the family of Assemblyman Eric Munoz, M.D., who died yesterday of a heart ailment.

Dr. Munoz was one of the most deeply compassionate people we have worked with and his insights into health care issues will be sorely missed.

Here is a link to the statement of Munoz's district-mate, Senator Tom Kean, Jr.

Your blogger's first "job" on this career path was as an intern to Assemblyman Paul DiGaetano. At that job, I met Dr. Munoz for the first time. It was at an event he showed up to still wearing the scrubs he had from his day job. He was a welcome infusion of genuine humanity, and cannot be replaced.

On the Radio - Don't Tax Jersey Jobs

Thank you to all of our readers and CIANJ members who have reached out to their legislators to tell them not to increase business taxes during a recession. Together, we have managed to bring this issue to the forefront, and to alert the public that the primary reason the fund is broke is legislative mismanagement.

This morning, NJ 101.5 FM ran a news story on business taxes at the top of every hour. We've linked to it below to highlight that a tax on business is ultimately paid by every New Jerseyan. Remember, there is still time to visit CIANJ's Action Center and join the hundreds of business leaders who are voicing their opposition to the tax and you can follow the progress of our fight on www.DontTaxJerseyJobs.org.

NJ101.5 FM New Jersey 1st News

Taking Ellipses to Democracy

Proponents of the Employee Free Choice Act have been misleading Americans about the bill from the moment they gave it a misleading name. Last week, the SEIU blog took the rhetoric even further.

Their blog quotes a Wall Street Journal editorial as saying,

“The bill doesn’t remove the secret-ballot option from the National Labor Relations Act…”

At this point, the SEIU rejoices and tells card check opponents to start reading the Journal. We did just that, and now, let's look at the same sentence without the ellipses,

“The bill doesn’t remove the secret-ballot option from the National Labor Relations Act but in practice makes it a dead letter." (emphasis ours) 

In other words, the SEIU completely misrepresented the quote by leaving off the last part of the sentence. I believe it's what my college professors used to call "academic dishonesty", or in layman's terms: a lie.

dot, dot, dot, yada, yada, yada = good-bye secret ballot.

State Borrows From Fed to Pay for Unemployment Benefits

New Jersey's Unemployment Insurance (UI) fund is now officially broke. The fund has been paying out $75 million weekly during the recession and has been decimated by prior legislative raids that ignored some basic rules about the way insurance should amass capital. The AP is reporting that as of March 5, the state began borrowing money from the federal government interest-free to meet unemployment obligations.

Last year, employers paid about $1.5 billion into the UI fund, while workers contributed $305 million.

From the AP,

Corzine's $29.8 billion budget proposal allocates another $150 million to the fund, about $120 million less than he said he would put into it in February. About $207 million in additional help will come from the feds. However, that won't be enough to stop an automatic $350 million payroll tax increase to businesses on July 1, or about $90 per employee.

Had he not infused the fund with state money, a larger tax increase would have been triggered.

That last statement is true and we have acknowledged our appreciation of the governor's past infusions of a fund his budgets did not raid. Still, prior legislatures violated the principle of unemployment insurance and are now asking (with no real alternative) employers to pay twice for the same benefit.

Alternative conclusion:

Had the legislature not raided $4.7 billion, a tax increase would be completely avoided.

Budget Hearings Day 1

The Assembly and Senate Budget Committees will both host their first public hearings today. The Senate is meeting in Montclair while the Assembly meets in the State House.

If you can't make it to either hearing, you can follow the meetings live on-line.

• The Senate hearing is being webcast by Montclair State University with streaming video. That hearing is scheduled to begin at 9:00 a.m. and testimony will touch upon all areas of the budget.

• The Assembly hearing will focus on Health and Human Services, and Senior, Family and Children's Issues. That hearing begins at 9:30 a.m. and can be seen here.

Codey: Not So Fast With That Tax on the Wealthy

Senate President Dick Codey is not yet convinced of the merits of a tax hike on New Jerseyans earning more than $500k annually. From the Asbury Park Press,

Codey, a legislator since 1974, said he voted for the so-called millionaire's tax when it was approved in 2004 under former Gov. James E. McGreevey. Raising the tax even more may harm the state economy, Codey said.

"It's an easy thing to do politically, but in the long-run is it the right thing?' Codey said. "At some point it starts to have a negative effect.'

Advocates of an income tax hike on high wage earners will point out that New Jersey's average income tax rate barely ranks in the top half nationally. That's a fascinating statistic, but it's also irrelevant. New Jersey's top marginal rate (the one that would be increased) is among the top five, and the proposed surcharge would put it near number one. Is that really the way to improve our economy?

Deductive Reasoning

Governor Corzine has announced a revision to his original property tax deduction plan. The original proposal would have eliminated under-65 homeowners' ability to write-down their property tax bill on their state income tax form.

Now, the plan is to eliminate the deduction for those earning less than $150,000 per year. That move will restore the deduction for four-out-of-five New Jerseyans.

Astute budget watchers will note this: the deduction restoration has minimal impact on the state budget. That is because the amount of your deduction increases with the percentage of your income that you pay in taxes, which here in Jersey increases steeply . Therefore, excluding high wage earners keeps the "budget savings" largely in tact.

Taxing Jobs to Get Out of a Recession

CIANJ has been spending the last week working against the "Jersey Jobs Tax", which would charge companies an extra $90 per employee in payroll taxes to help fill the state's Unemployment Insurance (UI) fund. Your blogger just returned from a press conference on the subject and we'll be posting video shortly.

As both you regular blog readers know, the UI fund is filled by a tax on companies and on workers, with companies contributing about 88% of the money in the pool. However, previous raids on the fund have made it insolvent, and there will not be enough insurance money in the pool to meet state obligations. Therefore, Governor Corzine is proposing a $400 million payroll tax to make up for the shortfall.

$4.7 billion has been taken from the UI fund since 1993, and that mismanagement is the biggest reason the extra tax increase may occur. Yesterday, we launched www.DontTaxJerseyJobs.org to keep the public informed on the issue and to mobilize legislative contact. So visit the site and be sure to check out our Action Center for a two-minute investment in contacting your Senator and member of the General Assembly.

All Pain, No Gains?

The Governor is scheduled to deliver his budget address at high-noon today. CIANJ President John Galandak will be in the gallery and provide a response later this evening, but here are a few bits of information to preview the speech:

• "Pain on every page" is the phrase of the day
• Look for severe cuts to and the elimination of property tax rebates for non-senior homeowners who earn more than $50,000
• There should be only minor cuts to education, with spending on school districts possibly rising
• Tax hikes will be proposed on those earning $500,000 per year, those who smoke and those drink wine or liquor
• Businesses will be expected to pay about $80 for each employee in their firm in extra payroll taxes. This is because the UI fund is now running short during the recession - and after the legislature raided it of $4.7 billion in previous years.

The speech will be webcast live on NJN. Click here for their feed.

State of the State Budgets

As Governor Corzine prepares his budget remarks, we thought it would be a good idea to put New Jersey's budget shortfall in perspective. Check out this map from the National Conference of State Legislatures, which details shortfalls (where applicable) throughout the nation.

Here is their full report on the state of state budgets