NJ Business Matters: The Blog of the CIANJ

The Last Quacks

Today is Reorganization Day in Trenton. By the time New Jerseyans leave their offices, a new General Assembly will have sworn in, Governor Corzine will have delivered his final speech in office, Speaker-elect Oliver and Senate President-elect Sweeney will have lost their hyphenated titles, and thousands of pieces of legislation will have been re-filed. It's like a high school graduation on steroids.

And like any high school graduation, there was a flurry of last-minute activity to get to this point. Here is a quick rundown of some of the business-related bills passed during yesterday's legislative session.

• A-2491/S-1539- Changes specific terms in the Franchise Practices Act. In our view, it is an unnecessary intrusion by the government into defining terms in private contracts. Passed both houses
• S-2773 - Allows the Commissioner of Labor and Workforce Development to suspend business licenses, including a permanent revocation, for companies that "knowingly and repeatedly" violate state wage and benefit rules.
• S-2905 - Requires chain restaurants to post calorie information within the context of a menu and provide other nutritional information upon request.
• A-4347/S-3137 - Extends the life of building permits extended as part of the "Permit Extension Act of 2008" through December 31, 2012

UPDATED Lame Duck Watch: Senate Bill Targets Oyster Creek Generating Facility

Update at 4:18 p.m. - As promised, CIANJ President John Galandak's testimony is available at this link. At the conclusion of the committee hearing, Senator Smith announced he had surveyed the Senators on the panel and found that 3 were willing to release the bill from committee, while 3 wanted more information. Therefore, the legislation will be carried over to February and be reconsidered by the new legislature.

The Senate Environment Committee will consider legislation today that "imposes certain conditions on NJPDES permit for energy generation facilities that withdraw water from...a shallow lagoonal estuary". Sounds benign enough, but the legislation's intent is to alter the way the Oyster Creek Nuclear Generating Station operates to the point plant owner Exelon says will shut down the facility.

Bill advocates, who are many of the same groups that unsuccessfully opposed Oyster Creek's relicensing application with the Nuclear Regulatory Commission, contend the plant should replace its current system of water intake from Barnegat Bay with newly-constructed cooling towers. This, they contend, would protect the bay from thermal pollution while allowing the plant to remain operational.

We will post the testimony of CIANJ President John Galandak later today, but here are a few points he will mention to the Committee,

• As of today, the technology needed to take in the amount of water needed by Oyster Creek when a facility is not near another body of water, is not commercially available.
• Imposing this requirement will likely result in a shut down of the plant, and the immediate loss of 700 jobs, may of which are high paying. It will also remove hundreds of millions of dollars from the state economy through lost activity and increased energy prices
• Whether the legislature can take such action against a single facility based only on its water intake is legally questionable under the Clean Water Act
• The state's CO2 emission reduction goals cannot be met without the benefit of nuclear power. It is still the only technologically available source of power that can provide a reliable baseload while generating virtually zero greenhouse gas emissions.

The hearing begins at 1pm. We'll post testimony and the vote tally once it concludes.

Eleven Committees Meet To Discuss Maybe, Possibly, Spending

The Lame Duck session rolls on today with the meeting of 11 legislative committees - seven in the Assembly and four in the Senate - to discuss issues ranging from MVC fees to burdening restaurant owners with a new mandate. However, that all happens within the context of today's Star-Ledger story which notes that Democrats have not decided what, if anything, constitutes appropriate spending for a state with no money and a structural deficit that equals about one-third of the total budget.

"There’s balance in life," said Senate President Richard Codey (D-Essex), who favors some extra spending. "There’s people who say, ‘We can’t afford the money.’ There’s other people who are saying, ‘No, aren’t we a compassionate society?’"

Codey recently sparred with Senate Budget and Appropriations chair Barbara Buono (D-Middlesex) after she said her panel would not consider any bills today requiring additional cash — including measures he backs to refund some taxes paid by victims of Madoff’s Ponzi scheme and increase training and drug-screening for staff at state psychiatric hospitals and other facilities.

The trouble with Senate President Codey's position is that New Jersey is in the seemingly impossible position of simultaneously being a high tax state and flat broke. The reason we cannot afford much compassion now is not because of stingy taxpayers and legislators, but because previous decisions made in Trenton put us in this position.

That whole fault not being in the stars, but in ourselves thing.

Lame Duck Watch: Forbidding Subcontracting at Schools

Yesterday, the New Jersey School Boards Association released results of a survey which reports on taxpayer savings realized when school districts use subcontracting for non-instructional services. In total, 238 of New Jersey's districts reported saving a total of more than $38 million in the last year by subcontracting for services such as maintenance, cafeteria work and transportation.

On June 22, A-4140 was introduced and passed by the Assembly Education Committee within the same day. The legislation would effectively disallow subcontracting as a cost savings option for local school districts in difficult budget times. It would tie the hands of school districts (and therefore, taxpayers) by forcing them to keep non-instructional staff members as public employees - with all the well-documented costs associated with that.

The measure, strongly supported by the NJEA, was introduced and approved without thorough public review. Now, some in Trenton are considering pushing the bill through during the lame duck session. Keep checking back throughout the lame duck session to see if this lamest of ideas gets additional consideration in the remainder of this session.

Gov Orders Cabinet Heads to Cut $400 Million

In light of Treasury information detailing tax receipts coming in below expectations, Governor Corzine has ordered his department heads to present a total of $400 million in budget savings by December 1. The governor's statement is available here.

Last week, we learned that first quarter tax collections were more than $200 million below projections. That only exacerbates a projected $8 - $10 billion budget deficit already forecast for next year. Our applause to the governor for taking prudent steps to ensure that shortfall does not become worse. We also join in his call for the legislature to avoid passing bills that increase spending during the lame duck session.

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.

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.

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.

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.