Saying the time to act is now, Governor Jon Corzine used his first State of the State address on January 9 to prod legislators to enact comprehensive property tax reform. Corzine offered no new property tax reform proposals, but went through a long list of recommendations on which he and legislative leaders agreed in principle. Corzine also hinted that he would look at leasing State assets (such as the New Jersey Turnpike) to generate new revenues for the State.

To keep you informed about how property tax reform will affect your business, NJBIA has created a Web page, Property Tax Facts.

The crux of the proposed property tax reform program is a tax credit of up to 20 percent for homeowners earning less than $100,000 per year (those between $100,000 and $250,000 would receive 10 to 15 percent cuts). The Governor also would cap future property tax increases at 4 percent per year. The tax credits would be paid for through dedication of half of the sales tax increase, current property tax rebates funding and greater cost efficiencies in State and local governments. Corzine said he and legislative leaders agreed in principle to:

• cap the allowable annual increase in the property tax levy at 4 percent;
• revise the school aid formula and increase funding to reflect the needs of each child;
• reform healthcare and pension benefits for State employees;
• stop the “well-connected and self-serving” from exploiting benefits intended for career employees;
• institute regular and independent auditing of government spending;
• provide greater incentives for sharing services and voluntary consolidation among local governments and schools; and
• modernize New Jersey’s civil service laws that impede efforts for governmental cooperation.

NJBIA supports these policies.

To help pay for the reforms, Corzine said his administration is investigating the concept of “asset monetization”—leasing a State asset, such as a toll road, to a private entity to generate revenues.

While he did not specify any specific assets he would lease (toll roads like the Turnpike are often mentioned), Corzine said the idea offered tremendous potential to dramatically improve New Jersey’s fiscal standing. The revenues from leasing assets could be used to pay off billions of dollars in State debt, thereby reducing debt service payment and releasing billions of dollars a year in revenues the State could use to pay for other services. To do it properly, however, the State must ask for a high enough price for the asset and put conditions on its lease that sufficiently protect the public’s interest. Corzine said the Treasurer would provide a report in the months ahead.

Assembly Passes Expanded Business Closing Notification Bill—Legislation that would impose greater notification requirements and penalties on companies undergoing layoffs passed the Assembly on January 8. A-1044 (Van Drew, Johnson) would require employers with 100 or more employees to provide 90 days public notice before closing a business or laying off 50 or more employees within a 30-day period. If employers miss the notice requirements by even a single day, the bill would require them to pay employees the equivalent of one week’s wages for each year of employment. A-1044 is now awaiting action in the Senate Labor Committee. A similar Senate bill, S-472 (Sweeney, Doria), is awaiting action in the full Senate.

NJBIA opposes this bill because it would go far beyond the requirements of federal law or business-closing laws in any other state. Federal law requires only 60 days notice and does not penalize businesses with huge severance payments that could cost an employer hundreds of thousands of dollars. Businesses that lay off employees are usually struggling financially. Imposing these restrictions and onerous penalties at a time when a business is struggling to remain solvent would only aggravate its difficulties by chasing away suppliers and customers, costing New Jersey more jobs in the long run. For more information, contact John Rogers at ext. 209.

Bill Extending Prevailing Wage to BEIP Grant Recipients Clears Senate—The Senate on January 8 approved legislation that would force all businesses receiving Business Employment Incentive Program (BEIP) grants to pay prevailing wages on their construction projects. NJBIA strongly opposes the bill, S-2247 (Sweeney), because it would vastly limit the attractiveness of the State’s most effective job-creation program.

Prevailing wages drive up the cost of construction projects by 10 to 25 percent, forcing contractors to pay union-scale wages even if they don’t employ union workers. Prevailing wage requirements are usually reserved for publicly funded projects. S-2247 would force any company that receives a BEIP grant to pay prevailing wages on construction projects they undertake themselves. If the BEIP company occupies 55 percent of a property, its landlord or developer would have to pay prevailing wage for construction projects on that property. For many employers, paying prevailing wages would nullify any benefits received from BEIP grants. For more information, contact Art Maurice at ext. 247.

Three to be Inducted into the NJ Business Hall of Fame—Pamela Craig, chief financial officer of Accenture; Kurt Landgraf, president and CEO of ETS; and Paul M. Pantozzi, chairman and CEO of The Provident Bank will be the first to be inducted into the New Jersey Business Hall of Fame. NJBIA congratulates them. The Business Hall of Fame is a joint venture of Junior Achievement of New Jersey, the Star-Ledger, and NJBIA to provide role models for today’s youth by recognizing outstanding businesspeople. Craig, Landgraf and Pantozzi will enter the hall of fame as laureates at an April 19 dinner. More than 500 business executives, professionals, educators and political leaders are expected to attend. To learn more about the Business Hall of Fame, contact Chris Emigholz at ext. 201, or Junior Achievement’s Dawn Schwartz at 973-533-1133.

New Good Neighbor Call for Nominations, Deadline February 5—The 47th Annual New Good Neighbor Awards competition recognizes companies that have worked to bring about an improved business climate in New Jersey by building or renovating a commercial facility. Winners will be chosen based on economic benefit and job creation, architectural merit, and community involvement. The nominating deadline is February 5. Go here for more information.

Raise Your Visibility. Become an Event Sponsor—Golf & Tennis Day. NJBIA's Meet the Decision Makers series. First-rate events like these offer your company an excellent opportunity to reach their target audiences and heighten their visibility as an event sponsor. You can learn more about becoming an NJBIA sponsor online or contact Sherry Esteves at 609-393-7707, ext. 219.