State Street: Familiar headaches for executives in new year

January 07. 2013 3:00AM

By Jared Kaltwasser

With the new year under way and Gov. Chris Christie's State of the State address slated for this week, the thoughts of the business community are turning to 2013, and the large amount of uncertainty facing New Jersey companies.

Michael Egenton, senior vice president for government relations for the the New Jersey State Chamber of Commerce, said his group will watch Sandy recovery and the upcoming state budget debate closely. (New Jersey State Chamber of Commerce)

Top-of-mind at the New Jersey State Chamber of Commerce is the group's annual Walk to Washington, which is being held Jan. 31 and Feb. 1.

Michael Egenton, senior vice president for government relations, said this year's event will have a Hurricane Sandy-related theme: "Recover, Rebuild, ReNew Jersey." The annual event brings a train full of Garden State power brokers down to meet with the state's congressional delegation in Washington. Christie will keynote the Jan. 31 dinner, but members of Congress also will speak. Egenton said the chamber will ask lawmakers to focus their remarks on what they're doing to help the state recover from the storm.

Meanwhile, Egenton said his group will also watch the upcoming state budget debate closely.

"The conversation's going to change because of Sandy," he said. "Everything's got to be taken in context with that. Part of that mix should include whatever we can do to again incentivize businesses and get them up and running."

John Galandak, president of the Commerce and Industry Association of New Jersey, said one Sandy-related area to watch this year in Trenton will be land-use regulation. But he said he's also looking at how the storm affects policy outside the Statehouse — particularly the budgets of local municipalities. Galandak said it's likely many towns will have large-scale losses of ratables due to property destruction. How they deal with those losses could have a major impact on companies' bottom lines.

Another potentially major impact is the implementation of the health care law. While the highest-level question, the survival of "Obamacare," was answered resoundingly last year, many smaller questions remain.

Galandak said his members continue to watch the rollout closely, as many are confused about the details — not unlike Christie, who last month declined to set up a state health care exchange, citing lack of details from the federal government.

Melanie Willougby, senior vice president at the New Jersey Business and Industry Association, said Sandy will remain the top priority for them as well, but one of the most important issues she'll be working on is the fight over the minimum wage. The Legislature last month sent Christie a minimum wage increase bill that links future increases to the consumer price index. And Willoughby said the fight isn't over, as Democrats have threatened to put the issue to voters if Christie rejects the bill.

"If that does happen, it would require waging a campaign against it," Willoughby said.

Easing concerns over rising
unemployment insurance tax

While uncertainty is likely inevitable for the near future, one South Jersey legislator is looking to quickly ease one concern for businesses — unemployment insurance taxes.

Sen. Fred Madden (D-Turnersville) is sponsoring a bill that would forestall a planned 10 percent unemployment insurance surcharge set to take effect in fiscal 2014. The move would save businesses an estimated $293 million.

Madden, chair of the Senate Labor Committee, said the move makes good sense in a state with an unemployment rate that's greater than 9 percent.

"Taxing the businesses with too high of a contribution rate will result statewide with additional layoffs, plus services (cuts) and, in some cases, closures of businesses," he said.

Companies were slated to pay the highest unemployment rates in the state's rate table, plus a 10 percent surcharge, as part of a plan to replenish the state's ailing Unemployment Insurance Trust Fund. Madden's bill, S-2404, would let business pay the "Column E" rates on the state's rate table without the extra surcharge.

Sen. Stephen Oroho (R-Sparta) is co-sponsoring the bill. If passed, it would follow in the footsteps of similar legislation passed in the 2012 and 2013 fiscal years. Madden said he's making his push earlier this time around because it's clear the lower rates help.

"In the past I've waited until April or May to do this," he said. "But look, I've been through this enough to know this is a good thing for businesses."

The surcharge suspension isn't Madden's only planned change. He's also introduced a bill that would hold harmless those businesses forced to lay off workers due to Hurricane Sandy. Businesses that pay into the state's unemployment fund are given an "experience rating," based on their employees' usage of unemployment benefits. The ratings allow the state to penalize companies that frequently lay off employees by charging them higher unemployment insurance rates; Madden's bill would prevent Sandy-related layoffs from harming that experience rating.

The proposal is part of S-2408, co-sponsored with Sen. Joe Vitale (D-Woodbridge), which contains a package of storm-related benefits for homeowners and businesses. It was introduced Dec. 20 and referred to the Senate Community and Urban Affairs Committee.

Bill to shift deadline for tax appeals
awaits Christie's pen

Companies looking to file tax appeals in some counties may need to act sooner this year. A bill creating a pilot program to shift property tax appeals into late winter is sitting on Christie's desk, having unanimously passed both houses.

The measure was approved by the state Senate in October, and by the Assembly on Dec. 17. It would require tax appeals to be heard in February, March and April, instead of May, June and July, in pilot program counties. The move would let towns finalize their tax lists in advance of mailing out tax bills in June. Currently, tax lists aren't finalized until Jan. 10, more than halfway through the fiscal year.

Sen. Jeff Van Drew (D-Cape May Court House) said successful tax appeals can ravage local budgets, and force local governing bodies to deal with shortfalls late in the fiscal year.

"Putting in place a structure that creates more certainty will allow local governments to budget under an improved system, but will also better ensure that taxpayers are not forced to shoulder increasing debt loads due to bonding or to endure spikes in property taxes," Van Drew said in a press release.

If signed by Christie, two counties would participate during the first two years of the program. A third and fourth would be added the following two years.


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