Three Southern New Jersey legislative leaders told 100 business people that they will seek to prevent higher taxes proposed in Governor Jon Corzine's budget and support ending diversions from the State's Unemployment Insurance Fund, but differed on ways to address skyrocketing health insurance costs. Assembly Budget Committee Chairman Louis Greenwald, Senate Labor Committee Chairman Stephen Sweeney and Senate Republican Conference Leader Martha Bark participated in an hour-long panel discussion moderated by NJBIA Vice President Frank Robinson as part of NJBIA's Meet the Legislative Leaders series, held March 31 in Cherry Hill.
On the budget, Greenwald said: “My advice to people is to remain calm.” The Governor's budget proposal includes a mix of tax increases and program cuts that will be thoroughly reviewed by the Legislature before anything is enacted. Greenwald pointed out that last year, then-Governor Richard Codey proposed an austere budget to fix a multi-billion dollar deficit. “As we went to work, we found savings and we were able to completely eliminate every tax increase” that had been proposed, Greenwald said. While he could not promise that the Legislature would be able to eliminate all the proposed tax increases, Greenwald said that is his goal.
Sweeney pointed out that a large portion of the State budget went to local governments and that regionalization had to be part of the equation to get State spending under control. He suggested a commission modeled on BRAC to recommend where local government entities should consolidate and have all of the recommendations receive an up-or-down vote. (BRAC is the federal Base Re-Alignment Commission that recommends closure of military bases. It is set up to receive an up-or-down Congressional vote to avoid political considerations in decisions affecting military facilities.) “We have too much government,” Sweeney said. “Actually, we're going to have to force (regionalization).”
Bark said that she was concerned that tax increases, and in particular the sales tax increase, would further damage the State's business climate and make things even worse. “Whatever we do with the budget, it must create a climate that says ‘come on in businesses, because we need you desperately.'”
NJBIA strongly supports full reinstatement of net-operating-loss (NOL) deductions that allow businesses to spread out deductions from losses over several years. The Association also supports letting the Corporation Business Tax alternative minimum assessment, which taxes the gross receipts of some businesses, expire as scheduled on July 1. When asked if the Republicans would support these measures, Bark replied, “Will we ever.” Sweeney pointed out that he cosponsored legislation for a partial restoration of NOL deductions. Greenwald indicated he was sympathetic to the tax burden the business community has endured in the past. “The business community five years ago stepped up in a big way to close a $9 billion budget deficit,” he said.
On the subject of healthcare, Greenwald and Sweeney expressed anger at large profitable companies such as Wal Mart, which they believe push employees into government-funded health insurance programs to lower their own health insurance costs. Sweeney has sponsored legislation that would make companies with more than 1,000 employees spend about $8,700 per person on health insurance or pay the balance to the State in the form of a healthcare tax. (NJBIA opposes this bill.) “Those are your tax dollars that are being used to give your competitor free health insurance,” Sweeney said.
Bark strongly disagreed with the healthcare tax bill, saying that reducing health insurance costs should be the Legislature's goal. “When you start to tell a business how to run itself, you cause a lot of problems.”
On the topic of the Unemployment Insurance trust fund, all three legislators pledged to oppose diversions of UI funds for other purposes. Sweeney said the Senate Labor Committee, which he chairs, would hold hearings on protecting the fund. “(The UI fund) wasn't broken. There's nothing wrong with it. It had huge surpluses. We drained it.”
Greenwald said, if necessary, he would lower the trigger in the UI fund before it would result in an automatic tax increase this year. (The law requires payroll taxes to increase once the balance of the UI fund drops below a certain level.) “The tax increase is not a reality. It is something that will not happen” this year, Greenwald said. Meanwhile, Bark said that raiding the UI fund is wrong, no matter what the fund balance. “If there is a lot of money that is not needed, it should be returned to the employer and employees, because it's their money,” she said.
The Southern New Jersey Meet the Legislative Leaders breakfast was sponsored by AT&T, BP, the Chamber of Commerce Southern New Jersey, Jersey Central Power and Light, MyWireless.org, NJM Insurance Group and Verizon.
First Meet the Decision Makers Program on Wednesday, April 12—When a new Governor is elected, a whole new group of players comes to Trenton . At NJBIA's Meet the Decision Makers breakfasts, you can get to know the key members of Governor Jon Corzine's cabinet and staff. Each breakfast will begin with registration at 7:45 a.m. and be held at Forsgate Country Club, Monroe Township , just off of Turnpike exit 8A . The cost to attend each breakfast is $69 per person for NJBIA members and $105 for nonmembers. For more information, contact Stacy Wichner at 609-393-7707, ext. 213. To become a sponsor and receive maximum recognition, contact Sherry Esteves at ext. 219. The events are:
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