Democrat Robert Menendez was elected to a full-term in the US Senate, defeating Republican State Senator Tom Kean Jr. by an 8-point margin in a statewide campaign that had been much closer for most of the year. Menendez was part of a national Democratic wave that overturned 12 years of Republican control of the US Senate and House of Representatives. In the House, incumbent Republican Michael Ferguson fended off a strong challenge from Assemblywoman Linda Stender in the 7th Congressional District as all other New Jersey incumbents won handily.

The big race was for the Senate, however, as Menendez’s win helped swing the balance of power in the Senate. A Kean victory would have maintained Republican control of the Senate, while the Menendez victory sealed the takeover. Polls had shown the race to be very close until undecided voters broke heavily for Menendez, giving him a 53-percent to 45-percent vote margin.

In the 7th Congressional District stretching through Middlesex, Union, Somerset and Hunterdon Counties, Ferguson edged out Stender 50 percent to 48 percent in what amounted to the only close House race in New Jersey. Former Assembly Speaker Albio Sires was elected to Menendez’s 13th District seat to fill the only vacancy in the State. He will take office immediately.

Nationally, Democrats picked up 27 House seats, giving them a 229- to 198-seat majority, with eight races still being contested. In the Senate, Democrats knocked off six Republican incumbents to grab what is effectively a 51- to 49-seat majority (two Senators are officially independents but will caucus and vote with the Democrats). US Rep. Nancy Pelosi will become the first woman speaker of the House when members are sworn into office in January.

With the shift of power comes a change in the legislative agenda in Congress, as many Democrats have staked out different positions from the Republicans. Many oppose expanding international trade agreements and want the Administration to pressure China on a number of trade issues. Businesses can also expect more consideration of the priorities of organized labor, including instituting card-check, where a business is unionized once a majority of workers sign a card indicating interest in joining a union, but no election is held. On taxes, Democrats may press for relief on the alternative minimum tax but will not repeal the estate tax. Immigration reform that provides an ultimate pathway to citizenship may also be considered, as well as an increase in the minimum wage.

Voters Approve All Three Statewide Public Questions—The three statewide public questions on the November 7 ballot won overwhelming approval. The public voted 67 percent to 33 percent to constitutionally dedicate one-half of 1 cent of the State sales tax to property tax relief. This was part of the compromise over the 1-cent increase in the sales tax approved by lawmakers in July. Approximately $600 million a year will be set aside. Using corporation business tax revenues to fund parks and land preservation was approved 58 percent to 42 percent. This does not increase the tax rate but takes $15 million a year from funding that is constitutionally dedicated to specific environmental programs like hazardous waste removal and dedicates it to land preservation through 2015. Finally, dedicating all gasoline tax revenues to capital projects like road construction was approved 58 percent to 42 percent. New Jersey’s gasoline tax stands at 10.5 cents per gallon, only 9 cents of which was used for transportation projects. The rest went to fund the State budget. Now, the full 10.5 cents will be used for transportation projects.

New Jersey Ranked Worst State to Operate a Small Business—The national Small Business and Entrepreneurship Council has ranked New Jersey 50th in the nation in its Small Business Survival Index, confirming again that the State suffers from one of the worst business climates in the country. The "Small Business Survival Index 2006" analyzes 29 different government-imposed or government-related costs, including taxes, regulations and government spending, to determine which state governments were friendliest to small businesses and entrepreneurship. The best small business climates were found in South Dakota, Nevada and Wyoming respectively. For states surrounding New Jersey, Pennsylvania ranked 16th, Delaware was 19th, Connecticut came in 32nd, and New York 45th. The survival index comes on the heels of a National Tax Foundation analysis that ranked New Jersey’s business tax climate 48th in the nation.

The poor business climate is taking its toll. New Jersey’s private-sector job creation continues to lag well behind that of the rest of the nation. The Governor and Legislature must work with business to cut health insurance and energy costs, lower regulatory burdens and costs, and reduce taxes.

Legislative Leaders Oppose Tax Shifting as Property Tax Reform—Senate President Richard Codey and Assembly Speaker Joseph Roberts have said the property tax reform plan they are working on will not include shifting the tax burden to other local taxes, such as a local sales tax or income tax. In a November 6 Star Ledger article, the top two legislative leaders said they were focusing on a revised school funding formula, local government spending caps and government consolidation.

The Legislature faces a self-imposed November 15 deadline to develop a comprehensive property tax reform plan that can be voted on by the Legislature before the end of the year. NJBIA believes that reining in local government spending, not shifting the tax burden onto other sources, is the key to property tax reform. On November 9, Codey and Roberts said they expected to meet that deadline and provide a plan that would reduce property taxes by an average of 20 percent for the majority of homeowners. For more information, contact Art Maurice at ext. 247.

NJBIA Seminar: Learn How to Comply with State Environmental Regulations, Wednesday, November 15—Don’t wait until the inspector from the NJ Department of Environmental Protection (DEP) shows up at your door! Find out what permits you need and how to get them approved at NJBIA’s “How to Comply with State Environmental Regulations,” which will be held from 8:00 a.m. to 12:45 p.m. Wednesday, November 15, at Forsgate Country Club in Monroe Township (Exit 8A, NJ Turnpike). Find out what the DEP expects of your business, the actions you need to take and the documentation you need to provide.

You will receive key telephone numbers, contacts and Internet links to help you get the right information quickly. You will also receive at no extra cost a copy of NJBIA’s newly updated Environmental Compliance Digest. The cost to attend is $109 per person for NJBIA members and $139 for nonmembers. To register, contact Alex Hollywood at 609-393-7707, ext. 262, or register online now.

December 12: Public Policy Forum—This annual high-level conference brings together New Jersey’s top leaders in business and government for a thorough and lively discussion of current issues that have a great impact on New Jersey employers. Governor Jon Corzine will be our keynote speaker, and will be joined by four of the State’s top legislative leaders, seasoned political observers and experts on the New Jersey economy. Don’t miss this great opportunity to network with fellow business colleagues!

The event will be held from 7:45 a.m. until 2:00 p.m. at the Sheraton at Woodbridge Place in Iselin (Exit 131A, Garden State Parkway). The cost is $170 per person for NJBIA members and $230 for nonmembers. Breakfast and lunch are included. To register, contact Stacy Wichner at 609-393-7707, ext. 213, or register online now. Gain high profile exposure by becoming a sponsor; contact Sherry Esteves, ext. 219.

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.