At a recent hearing, representatives from several NJBIA member companies blasted the idea of a two-tier property tax system that would shift a greater portion of the property tax burden onto businesses. They said high taxes—both local property taxes and State taxes—are already driving companies out of the State. Creating a two-tier property tax system that discriminates against businesses by forcing them to pay a higher rate than homeowners would be devastating, they told the committee.

Testifying September 21 before the Joint Committee on Constitutional Reform were: Robert Kortenhaus, president and CEO of Bilkays Express Co. of Elizabeth; Patrick Deo, a partner in the financial planning firm of Deo, LaManna, Deo & Co. of Denville; Ralph Evangelista CPA, owner of the accounting firm Evangelista & Associates of East Brunswick; and Phil Schepel, vice president with the corporate relocation firm ADP Mintax of East Brunswick.

The Joint Committee on Constitutional Reform has been looking at the possibility of altering the uniformity or fairness clause of the New Jersey State Constitution to allow local governments to impose higher property tax rates on business properties. Right now, the constitution requires local governments to tax business and residential properties at the same rates.

Kortenhaus, who is in the shipping and warehousing business, said he has seen many large companies that were once his customers move out of New Jersey to more affordable states, such as the Carolinas, southern Illinois, Tennessee and Virginia. While his companies pay between 94 cents and $2 per square foot in property taxes in New Jersey, the states he mentioned charge between 20 and 50 cents per square foot. "I can tell you emphatically and with personal knowledge that any actions to initiate a two-tier real estate tax system will cause many of our larger companies to leave New Jersey and seek new locations for their manufacturing and warehouse requirements."

Evangelista said New Jersey businesses had already absorbed a number of business tax increases as well as the income tax increase of 2004 and this year’s sales tax increase. He pleaded with the committee not to heap a business property tax increase on top of it. "By increasing taxes like this, New Jersey does not present itself as a business friendly community. If we are going to chase businesses away, how can we create jobs?"

Deo said the very idea that businesses can afford to pay higher property taxes is false. In reality, the increased cost of doing business will find its way into higher prices being charged to the very consumers that property tax relief is supposed to help. "Simply put, this dual property tax system is another shell and pea game," he said. "It will not alter or reduce the overall tax burden."

Schepel said the days of New Jersey gaining significant new jobs from businesses moving operations from New York City are in jeopardy. Because New York City is more expensive than New Jersey, many businesses, especially Wall Street firms, have moved large portions of their operations across the river. This has enabled them to save money on operating costs while keeping their New York addresses. But according to a recent analysis Schepel undertook for a client, New Jersey’s cost advantage is now minimal. "New York City is taking significant steps to offer substantial tax incentives to retain its current employer base," he told the committee. "If a dual property tax system is enacted in New Jersey, our business cost advantage over New York City will disappear."

Minimum Wage Goes Up October 1 to $7.15 Per Hour—New Jersey’s minimum wage will increase to $7.15 per hour on October 1, an increase of $1 an hour over the current State rate of $6.15 per hour and $2 more than the federal minimum wage of $5.15 an hour. New Jersey is one of 18 states with a minimum wage rate that is higher than the federal standard.

Future increases will be determined by the newly formed NJ Minimum Wage Advisory Commission, which will annually “evaluate the adequacy of the minimum wage.” The commission will take into account such factors as New Jersey’s cost of living and changes in the purchasing power of the minimum wage. For more information, contact John Rogers at ext. 209.

NJBIA to Honor Nine Companies at Awards for Excellence Dinner, Tuesday, October 17—NJBIA will honor nine companies for their outstanding contributions to job growth, the environment, their employees and communities at NJBIA's 2006 Awards for Excellence Dinner on Tuesday, October 17, at the Hilton East Brunswick (just off exit 9 of the NJ Turnpike). The event will begin at 6:00 p.m. and will include a reception, dinner and the awards presentations. The price is $149 per person. Tables of ten are available. To register, call Stacy Wichner at 609-393-7707, ext. 213, or register online now. To be a dinner sponsor, call Sherry Esteves, ext. 219.

October 25 Seminar: Hot Legal Topics for Employers—Sexual harassment, employee privacy, age discrimination. They're more than just topics in your employee handbook, they're legal landmines. Step on one and you and your company could be in big trouble. That's why NJBIA is offering its half-day seminar, "Hot Legal Topics for Employers." From 8:30 a.m. until 12:30 p.m. at the Holiday Inn in Tinton Falls (1 mile off Exit 107 of the Garden State Parkway). Register online for this great event or contact Katie Wittkamp at 609-393-7707, ext. 239.

November 3 Seminar: Selling to the Top: Doing Business with Top NJ Companies and State Government—Find out how you can sell your goods or services to State government and top New Jersey companies at this half-day seminar. Get practical tips from purchasing agents. Government officials will tell you how to become a certified minority- or women-owned business; you will also be able to register as a qualified business on the spot. The event will be held from 8:00 a.m. until 12:30 p.m. at the Sheraton Newark Airport Hotel. The cost is $109 per person for NJBIA members and $139 for nonmembers. Register online now, or call Katie Wittkamp at 609-393-7707, ext. 239. To become a high-profile sponsor, call Sherry Esteves, ext. 219.

Mark Your Calendar for These Other NJBIA Events: How to Comply with State Environmental Regulations, November 15... NJBIA Public Policy Forum, December 12.

Raise Your Visibility. Become an Event Sponsor—The Awards for Excellence Dinner. NJBIA's Public Policy Forum. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. Learn more about becoming an NJBIA sponsor by contacting Sherry Esteves at 609-393-7707, ext. 219.