Governor Jon Corzine unveiled his long-awaited financial restructuring plan on January 8, proposing a combination of toll hikes, a spending freeze and budget controls to fix New Jersey's finances. The toll hikes would pay for bonds that would be used to cut New Jersey's $32 billion debt in half and pay for decades' worth of transportation infrastructure projects. At the same time, Corzine pledged to freeze State government spending at this year's level and prohibit future spending from exceeding recurring revenues. Corzine said he would also seek voter approval of a constitutional amendment to require voter approval of future borrowing that isn't backed by an identifiable source of revenue.

Addressing both houses of the Legislature on the same day dozens of newly elected lawmakers were sworn into office, Corzine presented the plan as a fundamental change in the way New Jersey handles its finances, one that he said will "end the era of financial imbalance and fiscal mismanagement once and for all."

Corzine stressed that none of the roadways would be leased or sold to a private entity. Rather, the State would create a nonprofit Public Benefits Corporation to raise as much as $40 billion in debt, which would then be paid back with the extra toll collections. Tolls would increase along the Garden State Parkway, New Jersey Turnpike and Atlantic City Expressway, and be extended to Route 440. Tolls would rise 50 percent every four years between 2010 and 2022, plus there would be annual increases tied to the Consumer Price Index (CPI). The Governor will hold a series of public meetings and hopes to have the plan approved by the Legislature in the next two months.

Mental Health Coverage Mandate Not Enacted

Legislators ended the 2006-07 legislative session without approving a costly healthcare coverage mandate that would have made it harder for employers and employees alike to afford health insurance. The legislation would have required all health plans sold in New Jersey's regulated market to provide unlimited coverage for the treatment of behavioral problems and substance abuse.

NJBIA opposed this bill because employer health insurance costs are already rising dramatically, and such a broad mandate would have made the plans even more costly. To its credit, the Assembly understood the importance of the cost issue and did not schedule a vote on the measure. For more information, contact Christine Stearns at ext. 260.

NJBIA Urges Pocket Veto for Unlimited Lawsuit Damages Bill

NJBIA is urging Governor Jon Corzine not to sign S-176 (Scutari), which would provide for unlimited emotional distress damages in wrongful death cases. The measure has passed both houses of the Legislature, but because the legislative session ended on January 8, the Governor only has until noon on January 15 to sign the bill into law. In a process known as a pocket veto, if he does not sign it by then, it will not become law.

The bill would allow for unlimited damages for emotional distress in wrongful death cases. It would make New Jersey one of only seven states to allow unlimited damages, likely driving up liability insurance and product liability insurance costs. It would also increase the cost of health insurance, as medical malpractice insurance premiums would rise. Contact Governor Corzine using our easy-to-use Voter Voice system and urge him not to sign S-176. For more information, contact Christine Stearns at ext. 260.

Job Retention, Trash Tax, School Funding and Greenhouse Gas Regulation OK'd

Legislators ended the 2006-07 legislative session on January 7 by passing bills for a new school funding formula, regulating greenhouse gases, expanding a job retention program, and imposing a new tax on trash collection. All measures have been sent to Governor Jon Corzine, who has until noon on January 15 to sign them. If he does not sign them by then, they will not become law. Here are the details.

Trash Tax, S-557 (Smith)/A-1886 (McKeon). The bill would impose a $3-per-ton tax on waste haulers, adding $34 million a year to New Jersey’s already high tax burden. The funds would be used for recycling programs. NJBIA opposed the bill because it would worsen an already dismal business tax climate and there is no indication that millions more in funding would improve recycling rates.

BRRAG Expansion, S-80 (T. Kean, Bucco)/A-1696 (Fisher, Van Drew). This NJBIA-backed legislation would lower the eligibility requirement for Business Relocation and Retention Assistance Grants (BRRAG) to 50 jobs from 250 jobs. Under BRRAG, businesses are eligible for a one-time business tax credit of up to $1,500 per job retained in or moved within New Jersey. To qualify, however, a business currently has to retain or relocate a minimum of 250 jobs, excluding 97 percent of the employers in New Jersey from participating in the program.

School Funding, A-500 (Roberts)/S-4000 (Buono). The bill would fundamentally change New Jersey’s school funding formula by ensuring extra funding follows economically disadvantaged students regardless of where they live. The current formula directs extra funding to the 31 urban “Abbott” school districts designated as poor by the New Jersey Supreme Court. The new formula would provide more aid to the suburban school districts that educate 49 percent of the State’s poor children.

Regional Greenhouse Gas Initiative, A-4559 (Chivikula, McKeon)/S-2976 (Sweeney, Smith). This bill would implement the Regional Greenhouse Gas Initiative (RGGI) by creating a cap-and-trade program for utilities to lower their carbon emissions. Electricity generators would purchase allowances for their carbon emissions up to a capped amount. Those that do not exceed their purchased emissions cap could sell their excess allowances to other generators who need them. NJBIA opposed the measure because several provisions will likely increase electricity rates for consumers who are already paying some of the highest rates in the nation.

Nominate Your Candidate for a New Good Neighbor Award by Feb. 4

The 48th 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. Plants, offices and commercial buildings, plus shopping centers may be nominated. Deadline for nominations is February 4. Download the nomination form.

Meet the Governor's Key Staff, Feb. 29

Meet Governor Jon Corzine’s new Chief of Staff, Chief Counsel and Chief Policy Counsel at the first in a series of Meet the Decision Makers breakfast briefings, Feb. 29 at the Forsgate Country Club. Get the latest on key issues such as financial restructuring, the budget and healthcare reform and find out what plans the Governor has for the coming year. This is a great networking event! Register online now, or contact Katie Wittkamp at ext. 236 for more information.