The Tax Foundation's newly released 2008 State Business Tax Climate Index, formally released October 11, ranked New Jersey 49th in the nation when it comes to business-friendly tax systems. New Jersey dropped from 48th last year, leaving the State ahead of only Rhode Island.

The index ranks states according to the taxes that matter most to businesses and business investment: the corporate tax, individual income tax, sales tax, unemployment tax and property tax. New Jersey ranked among the worst states in the nation on every tax except the unemployment tax, where it was ranked 24th.

The Foundation rankings come on the heels of a Rutgers University study that shows New Jersey's outflow of people leaving New Jersey has grown dramatically and is negatively affecting our economy. The report, Where Have All the Dollars Gone? produced by Rutgers Professors James Hughes and Joseph Seneca and Research Associate William Irving, concluded that in 2006 72,547 more people moved out of New Jersey to other areas of the United States than moved into New Jersey from other states. Furthermore, the study showed that those moving into the State were less wealthy than those moving out, reducing New Jersey's total income by $10 billion and State tax revenues by $680 million.

NJBIA believes this should be a wake-up call to the Administration and Legislature to make New Jersey a more affordable State for people to live and business to operate. Lower taxes, affordable health insurance, and lower energy costs should become top policy goals while costly new initiatives like paid family leave should be dropped.

For more information, contact at ext. 247.

Protect Balance and Cost Controls in Workers' Compensation System

New Jersey's workers' compensation system is more effective than those in most states because it provides injured workers with medical care and benefits, while maintaining effective cost-controls on employers' premiums, a recent analysis by NJBIA's research affiliate, the NJ Policy Research Organization (NJPRO) Foundation, concluded.

Created in 1911, New Jersey's workers' compensation system was mandated to be the exclusive remedy for occupational injuries and illnesses. Prior to this, employees had only one option—sue their employer in civil court and hope for the best. NJPRO's Facts for Discussion: Workers' Compensation in New Jersey concludes: "This is a system designed to try to balance the need to control employer cost without infringing upon employee benefits. This current configuration has served all of the stakeholders well for nearly 100 years."

One of the keys to its success is the way benefits are administered. In what NJPRO describes as a highly successful partnership among employers, employees and insurance companies, workers who get hurt on the job can count on receiving all of the required medical care. Additionally, injured workers out of work for more than seven days can receive wage replacement benefits of up to 70 percent of their weekly wage (capped at $711 per week in 2007) for up to 400 weeks. Medical benefits and wage replacement benefits are provided regardless of fault, avoiding costly lawsuits.

All employers, meanwhile, are required to carry workers' compensation insurance, but according to the study, premiums are structured in a way to promote safe workplaces. Premiums are not only based on the number of employees and the nature of their jobs, but also on a company’s safety record. Companies that have fewer claims or less serious claims than are typical for a particular type of job receive credit modifications that lower their overall premiums. Businesses that demonstrate a higher risk are subject to debit modifications, which increase their premiums.

Finally, New Jersey's system provides effective cost controls to keep premiums reasonable. The study cited three: New Jersey is one of 12 states where the employer selects the physician; New Jersey is one of 18 states that cap the length of time a worker can receive temporary disability payments; and New Jersey caps attorneys' fees at 20 percent of a judgment.

Various legislative proposals could alter New Jersey's workers' compensation system for the worse. Some of these would institute employee choice of physicians, carve out certain employee groups from the system, increase benefit levels or raise the cap on attorneys' fees.

NJPRO is New Jersey's leading policy organization producing innovative, timely and practical research on behalf of New Jersey employers. For more information, contact Executive Director at ext. 204.

New Alliance to Push Lawsuit Reform Initiatives

NJBIA has joined more than 30 other employers and organizations to reform New Jersey's civil justice system and reduce lawsuit abuse. The new organization, New Jersey Lawsuit Reform Alliance (NJLRA), is headed by Marcus Rayner, former district director for Congressman Mike Ferguson of New Jersey. NJLRA will be working to reduce the $7.6 billion burden that lawsuits place on the State's citizens and businesses.

In recent years, lawsuits and civil litigation have reached the point where they are affecting New Jersey's economic competitiveness. The backlog in the number of complex huge class action tort cases in New Jersey courts has increased 164 percent since June of 2006. An estimated 90 percent of New Jersey's class action lawsuits against pharmaceutical companies are filed by out-of-state residents. And New Jersey received a "dishonorable mention" in the American Tort Reform Association's Judicial Hellhole report. For more information, contact at ext. 260.

NJBIA to Honor 10 at Awards for Excellence Dinner, Oct. 16

Join NJBIA on October 16 as we recognize the exceptional achievements of this year’s Awards for Excellence winners. At this outstanding networking event, you will meet NJBIA members whose energy and vision has distinctly improved the quality of life enjoyed by the citizens of New Jersey. The winners will receive awards in four categories: job creation, outstanding employer, environmental quality and community service. The program begins at 6:00 p.m. and will include a reception, dinner and the awards presentations. Tables of ten are available. For additional information, call at 609-393-7707, ext. 239, or register online now.

Other Upcoming Events

How to Get the Best Deal on Health Insurance, Oct. 30 - At this half-day seminar, learn what to look for when buying a company health plan. Register today whether you are a small or medium-size business owner, human resource manager, benefits specialist, or anyone else involved in managing healthcare costs. This is one seminar you should not miss. The seminar will run from 8:30 a.m.-12:30 p.m. at Forsgate Country Club in Monroe Township. The cost is $109 per person for NJBIA members and $139 for nonmembers. For more information or to become a sponsor, contact at 609-393-7707, ext. 213, or register online now.

Protecting Your Business from Workplace Discrimination Liability, Nov. 16 - At this half-day seminar, learn strategies that can help your workplace avoid needless litigation and liability. Each year, businesses of all sizes lose millions of dollars from workplace discrimination lawsuits. Hear from top human resource lawyers about their experience utilizing the most effective policies to protect your business, and your employees, from discriminatory behavior. The seminar will run from 8:30 a.m.-12:30 p.m. at the Sheraton Eatontown in Eatontown. The cost is $109 per person for NJBIA members and $139 for nonmembers. For more information, to register, or to become a sponsor, contact at 609-393-7707, ext. 213.