Business Summit Offers Recommendations for a Stronger New Jersey

Six panels of experts, more than 500 business leaders and the state's four top-ranking legislators – Democrats and Republicans – came together to problem-solve at the two-day New Jersey Business Summit in Atlantic City last week, Sept. 17 and 18. And there were more than two dozen media members there to document the affair.

This event was unprecedented in that it united more than 40 separate organizations that represent business, labor, hospitals, universities and nonprofits in a singular mission - address the most pressing issues stifling economic growth in the Garden State.

At the Summit, these groups began to craft recommendations for a better New Jersey to present to the State Legislature.

New Jersey Chamber of Commerce President Tom Bracken set the tone in his opening remarks when he urged participants to set the bar high for New Jersey. “We are in a so-so rut. We are in neutral and we need to raise the bar significantly,” he said.

Michele Siekerka, president of the New Jersey Business & Industry Association, said, “We must grab on to an agenda that has common ground, and move that agenda forward.”

It didn’t take long for summit participants to propose ways to make New Jersey’s business climate more competitive with other states and nations.

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A panel on regulations and mandates suggested reducing the number of offices that builders must deal with to get permits; cut the number of agencies that regulate a single issue; and establish a red tape review commission for each state agency and department.

“There is much legislation and regulation that has outlived its usefulness,” said Dennis Toft, co-chair of the environmental group at the law firm Chiesa, Shahinian & Giantomasi. “If the state is going to regulate something, it should not be regulated at the local level. We should consider not regulating things that other states do not regulate.”

Recommendations

• The Office of Legislative Services should analyze each piece of legislation for cost and revenue. It should look at what proposed legislation costs state businesses, and explore how it affects the business climate.
   
• Reform the Administrative Procedures Act. It takes a year to adopt a rule in this state, which is too long. Make comment and response process easier so an agency doesn’t have to go through a year-long process.
   
• If the state is going to regulate something, it should not be eligible for local regulatory action.
   
• If other states don’t regulate something, New Jersey should not.
   
• Reduce the number of places to go to get construction permits. Rules at each office sometimes conflict with each other. This raises the cost of housing.
   
• Establish independent red tape review commissions for each state agency and department.
   
• Expedite the process for permits and approvals.

A panel on taxes suggested that New Jersey cut either the estate tax or the inheritance tax. Currently New Jersey is one of only two states that imposes both (Maryland is the other) – a fact that is unquestionably driving high-income residents out of New Jersey. "People are migrating out of state to states like Florida and Pennsylvania," said Linda Bowden, New Jersey Regional President, PNC Bank. "Pennsylvania has no inheritance tax and a lower estate tax. Florida has no income tax." Bowden added, "Raise the estate tax exemption. Bring down the inheritance tax. A few small tweaks in the tax code would make a big difference."

Recommendations

• Raise the estate tax exemption or eliminate the inheritance tax.
   
• Help small business with capital gains losses when they are in the startup phase and growing phase.
   
• Provide tax deductions for charitable contributions.
   
• Raise the retirement income exclusion for individuals.
   
• Provide tax relief/incentives for small and medium sized businesses.
   
• Rethink how to fund education, besides property taxes. New Jersey towns are rejecting residential projects because it would attract kids, which makes the project too expensive.
   
• Control the tax burden on individuals or New Jersey will lose valuable talent.

A panel on workforce readiness urged educators to instill more career skills in the high school curriculum, and urged colleges to provide students with more real world experiences through internships, mentorships, co-ops and research projects to help preserve New Jersey’s competitive workforce.

“There is a gap between what colleges produce and what the workforce needs,” said Narimam Favardin, president of Stevens Institute of Technology. “Less than one-third of workers are in a field related to their degree. There needs to be a bridge of the gap.”

On another note, Barbara Gitenstein, president of the College of New Jersey, said state government leaders must be mindful of public funding for higher education. “New Jersey is at the top of the list in investment in K-12 education, but it is near the bottom of the list in investment in higher ed.”

Recommendations

• Expand incentives for employers to recruit, hire and train employees; make employers more aware of these incentive opportunities.
   
• Career success should be part of the curriculum at least at the high school level. It’s important to begin mentoring opportunities at an early age.
   
• Colleges should  provide students with more real world experiences through internships, mentorships, co-ops and research projects to help preserve New Jersey’s competitive workforce.
   
• Provide programs that will help provide a workforce which is better aligned to employer needs, which will make New Jersey more competitive with other states.
   
• Provide public funding for higher education that is more in line with national average.

An especially lively panel on transportation and infrastructure said the state can no longer delay settling on a new revenue source to fund the state’s Transportation Trust Fund, a nearly broke account that pays for maintaining the state’s highways, bridges and mass transportation. This is a safety issue, and it is also critical to the business climate since the movement of goods and people are critical to the state economy, panelists asserted.

“New Jersey has not had a gas tax increase since 1988, but the (gas tax) continues to fund the infrastructure,” said Phil Beachem, president of the New Jersey Alliance for Action. “This is no longer sustainable.” He added the idea of a gas tax increase “needs bipartisan support so we take the political debate out of the question.”

Recommendations

• Increase local aid allocations to reduce the property tax burden and enhance and secure a safe transportation network.
   
• Bipartisan support for transportation funding to take the political debate out of the question.
   
• Invest in the sewer and water system.

Legislators Respond

A panel of New Jersey’s four legislative leaders - Senate President Steve Sweeney, Senate Republican Leader Tom Kean, Assembly Speaker Vincent Prieto and Assembly Republican Leader Jon Bramnick – occasionally displayed flashes of sharp partisanship, but the four agreed with two of the biggest proposals that came out of the Summit: New Jersey’s estate and inheritance taxes need to be loosened; and the Transportation Trust Fund need to be addressed.

The panel was moderated by Eric Scott, vice president of news and content at Townsquare Media and FM101.5.

“We agree that the estate tax and inheritance tax is a problem,” said Sweeney, a Democrat. “That has to be done. Period. The question is how do you phase it in so you don’t blow a hole in the budget?”

Sweeney added, “The infrastructure has to get fixed and we have to address whether (a funding source) is a (petroleum) sales tax or gas tax. There will be a tax. We need to be able to move people and we need to be able to move product.”

Assembly Republican Leader Jon Bramnick said, “I am ready to vote on a gas tax increase today.” Though he followed up with a condition: “I want a commitment that the estate and inheritance tax will be reduced.”

His fellow legislators did not exactly jump on board with that idea, but they didn’t dismiss it either.

“We need a balanced approach. We have a billion-dollar pension (gap),” Sweeney said. “We are in a hole right now and we have to get out of this hole. We can’t ignore some of our problems.”

Moving on After the Summit

Upon completion of the event, the legislators publicly agreed to meet with Summit representatives going forward and to follow-up on the event's proposals – a commitment that was met with applause from the Summit participants.

"I think we made some history here and I think we have a pathway to make things better for us," said Bracken, the New Jersey Chamber of Commerce president and CEO. "There's a brighter future out there for all of us."

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