Continuing its push for reduced spending, not tax increases or shifting, as the best way to reduce New Jersey’s highest-in-the-nation property taxes, NJBIA called for health benefits reform, pension changes, and greater consolidation and shared services at separate legislative hearings this week. NJBIA believes all government employees should contribute towards their health insurance premiums, new employees should be moved into a 401k-style pension program, and local governments should be more forcefully encouraged to consolidate.

“Compensation for government employees far exceeds compensation packages offered by private-sector employers,” NJBIA Vice President Christine Stearns told the Joint Legislative Committee on Public Employee Benefits Reform on October 12. “Our members tell us that public employee compensation should reflect that received by similarly employed private-sector employees. No worse and no better. After all, government employees work for all of us.”

Four joint committees will develop recommendations for property tax reform to be voted on by the Legislature before the end of the year. NJBIA is concerned that if the recommendations for reining in local government spending are not adopted, lawmakers will look to business tax increases instead. So far, spending reductions have not received enough attention.

On the issue of health benefits, most local government and school employees receive their health benefits through the State Health Benefits Program (SHBP), but contribute nothing towards the premiums and pay only minimal deductibles and copayments. Stearns told the benefit reform committee that reasonable cost-sharing provisions should be implemented. She recommended that all active employees and retirees contribute 20 percent to the cost of the premium, less expensive Preferred Provider Plans (PPOs) be more widely used, and copayments for doctor’s visits and prescription drugs be raised.

On pensions, NJBIA offered recommendations to make the State’s pension system more like the private sector’s by moving from defined-benefit pension plans to defined-contribution plans. As late as 1985, defined-benefit plans nationally constituted 80 percent of employer retirement plans for medium to large private employers. By 2003, that number had fallen to 33 percent. Today, taxpayer-funded defined-benefit plans are simply unaffordable as employees retire earlier and retirees live longer than ever before. NJBIA believes new employees and existing employees with fewer than five years in the State pension system should be moved into a defined-contribution plan.

NJBIA has also proposed elimination of pension padding (basing a career part-time employee’s pension on a late-career move to a full-time job), pension tacking (holding multiple government jobs to increase the salary base for pension purposes), and lump sum payments for years of unused sick time

Testifying October 10 before the Joint Legislative Committee on Government Consolidation and Shared Services, NJBIA Director Christopher Emigholz said the business community supports legislation that will encourage the more than 2,700 local government entities that levy taxes to share services and consolidate their operations.

Specifically, NJBIA supports A-51 (Roberts), which would simplify the State’s patchwork of laws that govern shared services and consolidation; A-54 (Roberts), which would grant county school superintendents greater authority in managing school districts; and A-55 (Panter), which would make it easier for the public to get detailed information on municipal and school spending.

EDA Proposes Adding Prevailing Wage Requirement to BEIP Grants—The NJ Economic Development Authority (EDA) has approved new requirements on its Business Employment Incentive Program (BEIP) that could limit the number of employers who will utilize this successful job creation tool. EDA will now write regulations to implement the new rules and publish them for public comment.

Among the changes is a new requirement that BEIP grant recipients pay prevailing wage on their construction projects. Prevailing wages are union scale wages that drive up the cost of construction projects and may nullify any financial benefits gained by the BEIP grant. This will almost certainly have a chilling effect on New Jersey’s job creation efforts. For more information, contact Art Maurice.

Tax Foundation Again Ranks New Jersey’s Business Tax Climate 48th in the Nation—For the second year in a row, New Jersey’s business tax climate was ranked 48th in the country by the National Tax Foundation, solidifying New Jersey’s reputation as a high-business-tax State. Only Rhode Island and Ohio were deemed to have worse business-tax climates than New Jersey. In surrounding states, Delaware was ranked 9th, Pennsylvania was ranked 22nd, Connecticut, 36th, and New York, 47th.

Although New Jersey’s overall score increased slightly, NJBIA President Philip Kirschner said such consistently low rankings were a great cause for concern by the business community and hurts the State’s economic competitiveness. “About the only good thing you can say about New Jersey’s ranking is that we are not dead last,” he said. “It’s kind of like being the Pittsburgh Pirates and saying ‘well, at least we’re not as bad as the Cubs.’”

Get NJBIA's Legislative Briefs Online—Exclusively for NJBIA members, NJBIA has made available online a complete list of the Legislative Briefs it has prepared on the most important bills it is following in the current session of the State Legislature. You can access the full list of briefs here and submit an online request for the ones you wish to receive. To obtain a list of briefs by fax, contact Joanne Gordy at ext. 216.

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.

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." The program will be held 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.